October 22nd, 2008 11:44 AM by Lehel Szucs
Wednesday's bond market has opened in positive territory as investors continue to dump stocks this morning. The stock markets showing significant losses with the Dow currently down 324 points and the Nasdaq down 36 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by another .125 to .250 of a discount point.
There is no relevant economic data scheduled for release today, therefore the bond market is relying on stocks for direction. With stocks still falling, investors are eyeing bonds as a parking space for funds, at least temporarily. This has benefited mortgage rates this week, however, I don't see that as a situation that will likely last long. Accordingly, I am shifting to a lock recommendation for immediate and short-term closings.
The only data scheduled for release tomorrow is weekly unemployment claims from the Labor Department. Analysts are expecting to see that 465,000 new claims were filed last week. This would be a slight increase from the previous week and would basically be good news for the bond market and mortgage rates. But, since this data tracks only a week's worth of claims, its influence on the markets is usually limited unless it varies greatly from forecasts.
The only other data scheduled for release this week is September's Existing Home Sales Friday morning. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
If I were considering financing/refinancing 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... Float if my closing was taking pla ce 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.
©Mortgage Commentary 2008