March 12th, 2010 10:52 AM by Lehel S.
Friday's bond market initially opened in negative territory but has since moved into positive ground. The stock markets are mixed with the Dow up 18 points and the Nasdaq down 2 points. The bond market is currently up 2/32, but we will still see a slight increase in this morning's rates of approximately .125 - .250 of a discount point.
This morning's big news was February's Retail Sales data from the Commerce Department. It showed a 0.3% increase in sales when a small decline was expected. Even if more volatile auto sales are excluded, sales exceeded forecasts by a wide margin. This led to the negative open in bonds and this morning's increase in mortgage rates because the data indicates consumers were spending more than thought. That raises expectations of economic growth that usually makes bonds and long-term securities less appealing to investors.
The second report of the morning came from the University of Michigan who said their Index of C onsumer Sentiment stood at 72.5 this month. This was lower than forecasts and means surveyed consumers were less optimistic about their own financial situations than many had thought. This is the good news of the morning because waning confidence usually means consumers are less likely to make a large purchase in the near future.
Next week will be fairly busy in terms of economic releases and events that may influence mortgage rates, particularly the middle days. There is nothing of relevance scheduled for Monday, but between Tuesday and Thursday we have a handful of economic releases, including two important inflation readings and another FOMC meeting. Look for 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... Lock if my closing was taking place between 21 and 60 da ys... 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.