Our Real Estate Blog

Mortgage Rates (11/8/2010)

November 8th, 2010 9:30 AM by Lehel S.

Monday’s bond market has opened up slightly following early stock weakness. The stock markets are starting the week by giving back some of last week’s gains. The Dow is currently down 68 points while the Nasdaq has lost 5 points. The bond market is currently up 3/32, but we still may see a slight increase or no change in this morning’s mortgage rates due to weakness late Friday.

There is no relevant economic data scheduled for release today. The rest of the week brings us the release of only two relevant monthly economic reports but neither of them is considered to be highly important. There are two important Treasury auctions that may influence mortgage rates, with the first coming tomorrow. This is also a holiday-shortened week with the bond market closed Thursday in observance of the Veterans Day holiday. The stock markets will be open Thursday, but bonds will not be traded, meaning that many lenders will be closed. 

The f irst relevant data is scheduled for Wednesday morning. Tomorrow and Wednesday brings us the 10-year Note and 30-year Bond auctions. The 10-year sale is the more important of the two as it will give us a better indication of demand for mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward revisions to mortgage rates.

It is fairly common to see some weakness in bonds just ahead of the sales as participating firms prepare for them. If the results of the auctions show a fairly good demand, those pre-sale losses are usually erased during afternoon trading. Therefore, some minor weakness in bonds late today or early tomorrow should not be too concerning.

Overall, it is difficult to predict just how active this week will be for mortgage rates. As expected, last week brought us quite a bit of volatility in rates. This week could be very calm or could be just as active as last week was. I don’t believe the economic data on tap will be a catalyst. I think the key will be the stock markets and tomorrow’s Treasury auction. If they give us favorable results, mortgage rates will likely close the week lower than this morning’s levels.

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 b e in the best interest of all/any other borrowers. 
Posted in:General
Posted by Lehel S. on November 8th, 2010 9:30 AM

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