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Mortgage Rates (5/16/2008)

May 16th, 2008 7:53 PM by Lehel Szucs

Friday's bond market has opened flat following the release of mixed economic data and new record oil prices. The stock markets are showing losses with the Dow down 39 points and the Nasdaq down 17 points. The bond market is currently up 1/32, but we should see an improvement in this morning's mortgage rates of approximately .375 of a discount point due to strength in bonds late yesterday.

Today's data gave us mixed results. April's Housing Starts showed stronger than expected results with an increase in starts of new homes. It was expected to reveal another decline in new home starts, indicating that the housing sector was stronger than thought. This is negative news for bonds because the weak housing sector is believed to have significantly contributed to the weakness in the overall economy.

The second report of the day was May's preliminary reading to the University of Michigan's Index of Consumer Sentiment. It showed a reading of 59.5 that w as lower than forecasts, meaning that consumers were less optimistic about their own financial situations than many had thought. This is good news for the bond market and mortgage rates because waning confidence usually means consumers are less apt to make large purchases in the near future.

Next week is light in the number of reports scheduled for release, but it does bring us a couple of important events. The first piece of data is Monday's release of the Leading Economic Indicators (LEI). It is a moderately important report but can influence bonds enough to lead to slight changes in mortgage rates. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float 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 ov er 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.


©Mortgage Commentary 2008

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Posted by Lehel Szucs on May 16th, 2008 7:53 PM

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