March 24th, 2010 1:16 PM by Lehel S.
This morning's bond selling has picked up steam into afternoon trading. The bond market is now down 38/32, which will likely cause upward revisions to mortgage rates shortly. We can expect to see another upward revision of approximately .250 of a discount point over this morning's .375 - .500 increase we already saw. It appears that the today's Treasury auction did not go as well as some had thought, leading to more selling in bonds.
The stock markets have also seen plenty of fluctuation since this morning's opening levels. Stocks started selling before bouncing off earlier lows. The Dow is currently down 42 points while the Nasdaq is down 15 points. These are close to where they were at this morning's update.
In economic news, the Commerce Department reported early this morning that new orders for durable goods rose 0.5% last month. This was close to forecasts, but a larger than expected incr ease in orders that exclude more volatile autos is helping to fuel today's early selling. This indicates that demand for big-ticket items improved from January, giving us a sign of economic strength.
February's New Home sales data was also posted this morning. It showed a moderate decline in sales of newly constructed homes, which could be considered good news for bonds and mortgage rates. However, this data is not important enough to heavily influence trading and unfortunately has been a non-factor in today's rates.
There is no important economic data scheduled for release tomorrow. We do have weekly unemployment claims from the Labor Department, but we usually do not see mortgage rates react to this data unless they show a significant surprise. Current forecasts have tomorrow's release showing 450,000 new claims for unemployment benefits being filed last week. This would be a decline from the previous week, but unless we see a much smaller or la rger number it likely will have little impact on tomorrow's mortgage rates.
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.