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Mortgae Rates (8/24/2010)

August 23rd, 2010 12:57 PM by Lehel S.

Monday's bond market has opened down slightly following early stock gains. The stock markets are kicking the week off with the Dow up 52 points and the Nasdaq up 6 points. The bond market is currently down 4/32, which should push this morning's mortgage rates higher by approximately .125 of a discount point.

There is no relevant economic data scheduled to be posted today. This leaves me to believe that the stock markets will be the biggest influence on bond trading and any potential changes to mortgage pricing this afternoon. If the stock markets extend their gains, we may see bond prices drop and mortgage rates move higher later today.

The rest of the week brings us the release of five relevant pieces of economic data for the bond market to watch in addition to two relatively important Treasury auctions. The first comes late tomorrow morning when the National Association of Realtors posts July's Existing Home Sales results. This data gives us a measurement of housing sector strength. It covers approximately 85% of home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts' forecasts. It is expected to show a decline from June's sales, meaning the housing sector is still softening. This would be good news for the bond market and mortgage rates because a weak housing sector makes a broader economic recovery difficult.

Overall, we will likely see the most activity in rates tomorrow morning, but Wednesday and Friday are also fairly important. If we manage to get weaker than expected results in the key reports and the auctions go well, we should see mortgage rates close the week lower than today's opening levels. But stronger than expected results in the economic reports and disappointing results in the Treasury sales will most likely lead to rates moving higher this week.

If I were considering financing/refinanci ng a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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. 
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Posted by Lehel S. on August 23rd, 2010 12:57 PM

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