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Daily Mortgage Rate Lock Advisory – Monday Feb. 23rd

Rate Lock Advisory – Monday Feb. 23rd

Monday’s bond market is currently down slightly despite stock losses. The Dow is currently down 53 points while the Nasdaq has lost 20 points. The bond market is currently down 4/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

The bond market and stock indexes are well off earlier levels. The stock markets opened in positive territory with the Dow up nearly 75 points earlier and the Nasdaq up 11 points. The bond market was down 12/32 during early trading, but as the stock markets have given back early gains and slid into negative ground, bonds are rising. This is likely as a result of investors shifting funds into bonds to escape the expected volatility in stocks. Some analysts are predicting stocks to fall further in the near future and bonds are benefiting.

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important tes timony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but a couple of them are considered to be of fairly high importance. None of this week’s relevant data is being released today.

Tomorrow morning brings us the first of this week’s data with the release of February’s Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 37.7 in January to 36.0 this month. A lower reading would be considered good news for bonds and mortgage rates.

Mr. Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late tomorrow morning. He will be speaking to the Se nate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either tomorrow or Thursday, but Friday may be fairly active also. This would be a good week to maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I wou ld…. Float if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.