February 12th, 2010 9:44 AM by Lehel S.
Friday's bond market has opened in positive territory after this morning's major economic news failed to reveal any significant surprises and overseas news from China has the stock markets in selling mode. The major stock indexes are showing sizable losses with the Dow down 128 points and the Nasdaq down 17 points. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
The Commerce Department reported early this morning that retail level sales rose 0.5% last month. This matched forecasts for the most part, meaning consumers spent no more than was thought. That is relatively good news for the bond market and mortgage rates because consumer spending fuels economic growth. Today's report did revise December's sales 0.2% better than previously thought, but it appears that news has not influenced trading or mortgage pricing.
February's preliminary reading to th e University of Michigan Index of Consumer Sentiment revealed a reading of 73.7. This was a decline from January's reading and lower than forecasts were calling for. This means that consumers are less optimistic about their own financial situations this month than many had thought. That is considered good news for the bond market and mortgage rates because waning consumer confidence usually translates into weaker levels of consumer spending.
Yesterday's 30-year Bond sale also was met with a lackluster interest from investors. This was no surprise and neither was the minimal reaction to the results once they were posted yesterday afternoon. Mortgage rates were not affected by the results of the sale yesterday.
Next week has several relevant economic reports scheduled, including two key inflation readings. Others include a couple of housing reports and a measurement of industrial output.
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.