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Mortgage Rates (12/16/2010 Thursday)

December 16th, 2010 8:48 PM by Lehel S.

Thursday’s bond market has opened in positive territory as the roller coaster ride continues. The stock markets are showing gains with the Dow up 31 points and the Nasdaq up 13 points. The bond market is currently up 4/32, but we will still see an increase in this morning’s mortgage rates of approximately .375 of a discount point due to late weakness yesterday.

This morning’s release of November's Housing Starts showed a 3.9% increase in construction starts of new homes. This was in-line with forecasts and since the data does not carry significant importance, its results have had little impact on today’s trading or mortgage rates.

The Labor Department said that 420,000 new claims for unemployment benefits were filed last week, down slightly from the previous week. Analysts were expecting to see a small increase in the number of claims, so this data can be considered negative for bonds and mortgage rates. However, as with today’s housing news, this weekly data is not important enough to the markets to heavily influence trading or mortgage pricing.

The Conference Board will post their Leading Economic Indicators (LEI) for November late tomorrow morning. This 10:00 AM release attempts to measure or predict economic activity over the next three to six months. It is expected to show a sizable increase in activity, meaning that it predicts an expanding economy over the next several months. This probably will not have much of an impact on bond prices or affect mortgage rates unless it exceeds current forecasts of a 1.2% increase from October’s reading. The lower the reading, the better the news for bonds. If it shows a smaller increase, the bond market may move slightly higher, leading to a minor improvement in rates.

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 p lace 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 16th, 2010 8:48 PM

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