Our Real Estate Blog

Mortgage Rates (12/10/2010)

December 10th, 2010 5:59 PM by Lehel S.

Friday’s bond market has opened in negative territory as investors close out an ugly week. The stock markets are relatively calm despite stronger than expected consumer confidence data. The Dow is currently down 3 points while the Nasdaq is up 1 point. The bond market is currently down 14/32, which should push this morning’s mortgage rates higher by approximately .250 of a discount point.

This morning’s first piece of data was October’s Goods and Services Trade Balance report. It showed that the U.S. trade deficit fell to $38.7 billion in October, falling well short of forecasts. However, this data is not considered to be highly important and has had little influence on this morning’s mortgage rates.

The second report of the day gave us the bad news that has pushed bonds negative this morning. The University of Michigan said their Index of Consumer Sentiment rose to 74.2 this month, exceeding forecasts. Analysts were expecting to see a reading of 72.5, meaning consumers were more optimistic about their own financial situations than many had thought. That is bad news for bonds and mortgage rates because rising confidence means consumers are more likely to make large purchases in the near future, fueling economic growth.

Next week is quite active with several very important economic reports scheduled for release in addition to another FOMC meeting. There is nothing of relevance scheduled for Monday, so it is fairly safe to say that the stock markets will be a large part of any changes to mortgage rates that day. The most important data comes Tuesday and Wednesday when we will get two key inflation readings and a highly important measurement of consumer spending with November’s Retail Sales report. Throw in another opportunity for Mr. Bernanke and friends to remind us of the hurdles facing the economy after Tuesday’s FOMC meeting and we have the potential for another week to remember. Let’s hope this one is a little more pleasant than the past two. Look for more details on next week’s events in Sunday’s weekly preview.

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. 
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Posted by Lehel S. on December 10th, 2010 5:59 PM



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