December 26th, 2008 6:31 PM by Lehel Szucs
Wednesday's bond market has opened in positive territory despite mixed results from this morning's economic data. The stock markets are showing gains with the Dow up 46 points and the Nasdaq up 3 points. The bond market is currently 7/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point.
There were two monthly reports released this morning along with weekly unemployment numbers. The first was November's Durable Goods Orders that showed orders for big-ticket products fell 1.0% last month. This was much stronger than the 3.1% decline that was forecasted, however, October's 6.2% drop was revised to a decline of 8.4%. That revision help offset some of the surprise from November's orders, this was still negative news for bonds and mortgage rates.
The second report of the day was November's Personal Income and Outlays data. The income portion of the report gave us favorable results with 0.2% decline in personal income and a downward revision of 0.2% to October's income reading. This means that consumers had less income to spend than was expected during those two months. The bad news came in the spending portion of the report that showed a 0.6% decline in consumer spending. It was expected to show a 0.8% drop, meaning consumers spent more than thought.
The third piece of news posted this morning was last week's unemployment numbers that showed 586,000 new claims for benefits were filed last week. This was nearly 30,000 above what analysts had forecasted. Unfortunately, this data is not given much weight because it tracks a single week's worth of claims.
The bond market will close early today and remain closed tomorrow in observance of the Christmas Day holiday. The stock and bond markets will be open Friday, but with no relevant economic news scheduled for release and another early close for bonds, I am not expecting to see much m ovement 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 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 home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2008