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Mortgage Rates (12/18/2008)

December 18th, 2008 4:17 PM by Lehel Szucs

Thursday's bond market has opened in positive territory despite slightly stronger than expected economic news. The stock markets have fluctuated between positive and negative ground during early trading, but are fairly flat at this point with the Dow down 28 points and the Nasdaq nearly unchanged. The bond market is currently up 20/32, however, we will still see an increase in this morning's mortgage rates as a result of weakness late yesterday. After peaking during afternoon trading, bonds closed well off their earlier highs. This led some lenders to revise rates higher yesterday, but many waited to reflect those changes in this morning's pricing.

The Labor Department reported that 554,000 new claims for benefits were filed last week. This was a decline from the previous week's 575,000 initial claims, but was pretty close to forecasts. Therefore, the news has had a minimal impact on bond trading and mortgage rates.

The Conference Board gave us their Leading Economic Indicators (LEI) for the month of November late this morning. They reported a decline of 0.4% that was slightly stronger than the 0.5% drop that was expected. This means that economic activity may slow over the next three to six months, but at a slightly slower pace than many had thought.

There is no relevant economic news scheduled for release tomorrow, so look for the stock markets to drive bond trading and mortgage rates. I am still concerned about further increases in mortgage rates from their recent lows, so please proceed cautiously if still floating a 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... Lock 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 h ome. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.


©Mortgage Commentary 2008

Posted in:General
Posted by Lehel Szucs on December 18th, 2008 4:17 PM

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