November 12th, 2008 8:40 AM by Lehel Szucs
The bond market is closed today in observance of the Veterans Day holiday and will reopen tomorrow morning. The stock markets are trading today but in negative territory. The Dow is currently down 240 points while the Nasdaq has lost 42 points. Some lenders may post rates today, but will likely use yesterday's afternoon rates.
This week brings us the release of only three relevant economic reports with only one of them being considered highly important. There is no relevant news scheduled for release tomorrow except for the results of the 10-year Treasury Note auction. Results will be posted at 1:00 PM ET and can influence bond trading enough to affect mortgage rates. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness and higher mortgage rates.
The first economic data of the week is September's Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities' proceeds are worth more when sold and converted to the investor's domestic currency. However, its results will not likely directly lead to changes in mortgage rates.
Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are Wednesday's and Thursday's since they can impact mortgage rates the most. But there is only one important report being posted and that doesn't come until Friday morning.
If I were considering financing/refinancing a home, I would.... Lock if my cl osing 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 guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2008