Our Real Estate Blog

Mortgage Rates (12/7/2010)

December 7th, 2010 1:45 PM by Lehel S.

Tuesday’s bond market has opened in negative territory following early stock strength, erasing yesterday’s gains. The stock markets are reacting favorably to the tax cut extension news, pushing the Dow higher 60 points and the Nasdaq up 18 points. The bond market is currently down 30/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount over yesterday’s morning pricing. Preventing more of an increase is strength from late trading yesterday. 

There is no relevant economic data being posted today, but we do have the 10-year Treasury Note auction taking place. This is the first and more important of the two auctions this week that have the potential to influence mortgage rates. Results of the sale will be posted at 1:00 PM ET, so any market reaction will come during afternoon hours. If there was a strong demand from investors during the auction, we could see bond prices improve thi s afternoon and mortgage rates revise lower. However, a lackluster interest could lead to upward changes to rates later today. The recent bond selling makes it difficult to be too optimistic about this sale, so please be careful if closing soon and still floating an interest rate.

There is also no relevant data scheduled for tomorrow. The Treasury will sell 30-year Bonds tomorrow, but today’s 10-year Notes are tied closer to mortgage bonds and likely will have a bigger impact on mortgage pricing. This leaves the stock markets to again take center stage tomorrow. If the major stock indexes extend their recent gains, we may see another increase to rates. However, losses in stocks should help improve mortgage pricing.

Friday morning has the week’s only relevant monthly economic data, but neither of the reports are considered to be highly important. This means we don’t have much to look forward to that may drive bond prices higher a nd mortgage rates lower. Yesterday’s improvements in rates helped give hope that this could be a good week for mortgage shoppers. Unfortunately, this morning’s about face is making that look less likely.

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 7th, 2010 1:45 PM

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