February 24th, 2010 11:05 AM by Lehel S.
Wednesday's bond market had initially opened down slightly but has since moved into positive territory during Fed Chairman Bernanke's congressional testimony. The stock markets are posting fairly strong gains after the Senate passed a $15 billion jobs creation bill. The Dow is currently up 75 points while the Nasdaq has gained 20 points. The bond market is currently up 4/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.
January's New Home Sales report was posted late this morning, showing a surprising drop in sales of newly constructed homes. The 11.2% decline in sales last month dropped them to their lowest level on record. That indicates that the housing sector is not as stabile as some wanted to believe and can be good news for the bond market. However, this data covered only approximately 15% of all home sales in the U.S. Friday's Existing Home Sales report tracks the other 85% of sales.
Cha irman Bernanke is in the process of delivering the Fed's semi-annual testimony on the status of the economy to the House Financial Services Committee. During his prepared statement he indicated concern about the employment sector and the unemployment rate that is expected to remain high for quite some time. He also said that he expects inflation to remain under control. Both were good news for the bond market and helped move bonds into positive ground.
He will continue to answer questions from committee members and any surprise answers could lead to more volatility in the markets today. He will repeat this performance for the Senate Banking committee tomorrow, but the second day usually does not bring many surprises. The prepared statement will likely be quite similar to today's speech, so any shocking developments will have to come from the Q & A part of the proceeding.
The only important data scheduled for release tomorrow is January's Durable Go ods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A smaller increase than the 1.4% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.
We will also get weekly unemployment figures from the Labor Department, but unless there is a wide variance between the announced number of new claims and the 460,000 total that is expected, this data will probably have little impact on tomorrow's mortgage pricing.
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... Lock if my closing was taking place over 60 days from now... This is only my opinion of w hat 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.