Our Real Estate Blog

Mortgage Rates (11/10/2010)

November 12th, 2010 8:29 AM by Lehel S.

Wednesday’s bond market has opened flat after this morning’s employment figures showed unexpected strength last week. The stock markets are showing losses, helping to prevent bonds from falling into negative ground. The Dow is currently down 46 points while the Nasdaq has lost 10 points. The bond market is nearly unchanged from yesterday’s close, but we will still likely see an increase of approximately .250 - .375 of a discount point in this morning’s mortgage rates due to weakness late yesterday.

This morning brought two pieces of economic data, but neither is considered to be highly important. September’s Goods and Services Trade Balance report showed that the U.S. trade deficit stood at $44.0 billion. This was a little smaller than the $44.8 billion that was expected, but was not a wide enough variance to affect mortgage rates.

The Labor Department said that 435,000 new claims for unemployment benefits were fil ed last week. This was short of expectations and a 4-month low, indicating that the labor market was stronger than thought last week. This is negative news for the bond market, but since it is only a single week’s worth of new claims it’s impact on today’s mortgage rates has been minimal.

Also worth noting is today’s 30-year Bond auction that may influence mortgage rates. Yesterday’s 10-year Note sale did not go very well, so there is little optimism that today’s auction will be much better. The bond market was in selling mode late yesterday, causing some lenders to revise rates upward during afternoon trading. Those losses are the biggest portion of this morning’s increase in mortgage pricing. I don’t believe that today’s sale will cause significant movement in mortgage rates, regardless if the sale goes well or not. But it could lead to a minor revision after results are posted at 1:00 PM ET.

The bond market will be closed tomorrow in observance of the Veterans Day holiday. The stock markets will be open for trading though. None of the markets will close early ahead of the holiday, so I would not be surprised to see some movement in rates before closing today as investors and lenders prepare for the day off. 

PLEASE NOTE: Since the bond market is closed tomorrow, there will be no update to this report. Some lenders may be open for business, but will likely use this afternoon’s mortgage rates until Friday morning.

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 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 guaran teed to be in the best interest of all/any other borrowers. 
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Posted by Lehel S. on November 12th, 2010 8:29 AM

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