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November 29th, 2010 1:44 PM
Monday’s bond market has opened in positive territory following early stock weakness. The stock markets are kicking the week off with sizable losses due to concerns about overseas financial issues. The Dow is currently down 128 points while the Nasdaq has lost 29 points. The bond market is currently up 9/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point over Friday’s morning pricing.

There are six pieces of economic news that may affect mortgage rates this week, but none of them will be coming today. This makes the stock markets the focal point for the rest of the day. If the major indexes extend this morning’s losses, we may see bond prices improve further and mortgage rates revise slightly lower this afternoon. However, if stocks are able to recover a good portion of this morning’s losses, we could see funds shift away from bonds and back into stocks, leading to slightly highe r mortgage pricing this afternoon.

November’s Consumer Confidence Index (CCI) is the first data of the week. It will be released late tomorrow morning. This Conference Board index gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This makes long-term securities such as mortgage-related bonds less attractive to investors and usually leads to higher mortgage rates. Analysts are expecting to see an increase in confidence from last month’s level, meaning consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 52.0 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher tomorrow. 

Overall, the most important day of the week is Friday with monthly employment figures being released, but we may also see sizable movement in rates Wednesday. Friday’s employment data could cause a significant change in rates, but Wednesday’s ISM index is also one of the more important reports we see each month. If those two reports reveal stronger than expected results, we will likely see rates close the week higher than this morning’s pricing. I suspect it will be another fairly active week for the markets and mortgage pricing, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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 an d cannot be guaranteed to be in the best interest of all/any other borrowers. 
Posted by Lehel Szucs on November 29th, 2010 1:44 PMPost a Comment (0)
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