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Mortgage Rates (5/27/2008)

May 27th, 2008 10:32 AM by Lehel Szucs

Tuesday's bond market has opened down slightly despite a weaker than expected consumer confidence reading. The stock markets are mixed with the Dow down 10 points and the Nasdaq up 9 points. The bond market is currently down 7/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Conference Board started this week's economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.

April's New Home Sales data was also released today, revealing a higher level of sales than was expected. However , today's report also revised March's sales lower. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general. But, this data is not considered to be of high importance to the bond market and mortgage rates, so its impact on today's pricing was fairly minimal.

Tomorrow morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a larger than expected drop, we should see rates improve tomorrow morning.

If I were considering financing/refinancin g 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.


©Mortgage Commentary 2008

Posted in:General
Posted by Lehel Szucs on May 27th, 2008 10:32 AM

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