Our Real Estate Blog

Mortgage Rates (2/25/2011)

February 26th, 2011 6:44 AM by Lehel S.

Friday’s bond market has opened flat due to early stock gains and mixed economic data. The stock markets are in positive ground after a couple days of selling. The Dow is currently up 38 points while the Nasdaq has gained 27 points. The bond market is currently up 3/32, which should keep this morning’s mortgage rates nearly unchanged.

There were two reports posted this morning, both considered moderately important to the markets and mortgage rates. The first one was the 4th Quarter GDP reading that showed a 2.8% annual rate of growth. This was well below the previous estimate of 3.2% and the 3.3% that was expected, meaning that economic activity was not as strong as many had thought during the last three months of 2010. This is basically good news for the bond market and mortgage rates, but a key inflation reading within the data was revised a little higher than first announced. This, along with the fact that this data is a little aged now, has prevented the bond market from rallying again.

The second report of the day and the final piece of data of the week was the University of Michigan's revision to their Index of Consumer Sentiment for February. They announced late this morning a reading of 77.5 that was much higher than the previous estimate of 75.1. That indicates that consumers were more optimistic about their own financial situations than expected and are more apt to make large purchases in the near future. Therefore, this is negative news for the bond market and mortgage rates.

Yesterday’s 7-year Note sale went fairly well considering the weak 5-year Note sale Wednesday. The results did help the bond market maintain the day’s gains as many traders were concerned another lackluster sale could lead to selling in bonds.

Next week is packed with economic data with relevant reports being released each day of the week. They begin with Monday’s posting o f January’s Personal Income and Outlays report that will give us a measurement of consumer ability to spend and current spending habits. The week ends with the almighty Employment report that will give us February’s employment statistics. In between we have two Congressional appearances by Fed Chairman Bernanke and a slew of economic reports. Look for more details on next week’s events in Sunday’s weekly preview.

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... 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. 
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Posted by Lehel S. on February 26th, 2011 6:44 AM

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