Our Real Estate Blog

Mortgage Rates (11/2/2010)

November 2nd, 2010 1:55 PM by Lehel S.

Tuesday’s bond market has opened has opened in positive territory despite early stock strength. The stock markets are up ahead of today’s elections with the Dow up 72 points and the Nasdaq up 17 points. The bond market is currently up 10/32, but we will likely see little change in this morning’s mortgage rates due to weakness late yesterday.

There is no relevant data scheduled for release today, so we will be watching the major stock indexes for direction in bonds. If stocks extend current gains, we could see bonds pull back and mortgage rates rise slightly. However, if stocks give up some of this morning’s gains, we may see mortgage rates improve slightly this afternoon. 

The FOMC meeting began this morning, but will not adjourn until tomorrow afternoon. There is no possibility of the Fed changing key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indi cation of when the Fed may make a move, particularly to help boost economic activity. 

The meeting will adjourn at 2:15 PM ET tomorrow, so any reaction to the statement will come during afternoon hours. Generally speaking, any hint that they may need to make a rate increase relatively soon would be negative news for bonds and lead to higher mortgage rates. The markets will actually be looking for news of another round of debt purchases by the Fed. If they do announce a sizable purchase program of government or mortgage debt tomorrow, we could see the bond market rally and mortgage rates move noticeably lower.

If I were considering financing/refinancing a home, I would.... Lock 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. 
Posted in:General
Posted by Lehel S. on November 2nd, 2010 1:55 PM

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