Our Real Estate Blog

Mortgage Rates (12/21/2010)

December 21st, 2010 3:31 PM by Lehel S.


Tuesday’s bond market has opened up slightly despite early stock gains. The stock markets are showing moderate improvements with the Dow up 53 points and the Nasdaq up 12 points. The bond market is currently up 3/32, but we will likely see little change in this morning’s mortgage rates due to weakness late yesterday.

There is no relevant economic news scheduled for release today, but tomorrow has two reports. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.5% annual pace during the quarter and this month’s revision is expected to show a small upward revision. A revision higher than the 2.7% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point I don’t think it will have much of an impact on mortgage rates tomorrow unless there is a sizable revision. 

The second report of the day is November’s Existing Home Sales report. This release will come from the National Association of Realtors while Thursday’s New Home Sales data is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither is considered to be of significant importance. Both of the reports are expected to show increases in sales, indicating housing sector growth. Weaker than expected readings would be considered positive for bonds and mortgage rates because they hint at a still weakening housing market, but unless the actual readings vary greatly from forecasts the results will probably have little impact on mortgage rates.

As we head into the week’s important data, I would not be surprised to see a little weakness in bonds, particularly in afternoon trading. Under normal circumstance s I wouldn’t be too concerned about it, but still being somewhat shell shocked means we should proceed with caution. This is especially true since we are seeing thin holiday trading, meaning the knee-jerk reaction to any surprises could be bigger than normal.

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. 
Posted in:General
Posted by Lehel S. on December 21st, 2010 3:31 PM

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