Our Real Estate Blog

Mortgage Rates (5/28/2010)

May 28th, 2010 12:01 PM by Lehel S.

Friday's bond market has opened in positive territory following weaker than expected economic news and early stock weakness. The stock markets are giving back a small part of yesterday's rally with the Dow down 30 points and the Nasdaq down 4 points. The bond market is currently up 14/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

April's Personal Income and Outlays data was the report that gave us favorable results. It showed that income rose 0.4% last month as expected, but spending was unchanged from March. This was well below the 0.3% increase in spending that analysts were expecting to see. This means that consumers did have more money to spend last month, but chose not to spend it. The increase is income is not necessarily good news, but since it matched forecasts it has had little impact on trading. The surprise in spending is good news because consumer spending makes up two-thirds of the U.S. eco nomy.

Also posted this morning was the University of Michigan's Index of Consumer Sentiment for May. It showed a reading of 73.6, nearly pegging forecasts. This means that surveyed consumers were slightly more confident about their own financial situations than previously thought, but not by enough of a margin to influence mortgage rates.

The bond market will close early today ahead of the Memorial Day holiday Monday. I don't tihnk this will significantly affect trading or mortgage rates, but we may see some movement as traders prepare for the long weekend. The stock and bond markets will be closed Monday in observance of the holiday and will reopen Tuesday morning.

Next week brings us the release of a couple of very important economic reports, including Tuesday's Institute of Supply Management's (ISM) manufacturing index Tuesday and next Friday's release of May's Employment numbers. 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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

Posted in:General
Posted by Lehel S. on May 28th, 2010 12:01 PM

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