June 11th, 2009 11:18 AM by Lehel Szucs
THURSDAY AFTERNOON UPDATE:
The bond market has gone into rally mode after today's 30-year Bond auction was met with a strong demand from investors. Despite continued stock strength (Dow up 113 points and Nasdaq up 25 points), the bond market has moved significantly from its flat open to currently stand up 26/32. This should improve this afternoon's mortgage rates by approximately .250 - .375 of a discount point. However, watch the indexes closely as this rally may be short-lived if there are no other reports or events to continue its support.
Yesterday's 10-year Note auction was actually received fairly well, but a couple of complex things transpired with bidding and the rates they were bought that led to selling after the results were posted. Today's sale was much more cut-and-dry and well received.
This morning's data was pretty uneventful. May's Retail Sales data showed a 0.5% increase in sales, which matched forecasts. The port ion of the report that tracks sales excluding volatile auto sales revealed a higher than expected increase. But this news did not have much influence on this morning's trading or mortgage rates.
The Labor Department reported that 601,000 new claims for unemployment benefits were filed last week. This was lower than the 615,000 that many were expecting, but this data is not important enough to heavily impact trading or mortgage rates unless it varies greatly from forecasts.
The last report of the week is June's preliminary reading to the University of Michigan Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 69.5. A smaller than expected reading would be considered good news for bonds, but since this report is only moderately important it likely will not influence mortgage rates considerably.
If I were considering financing/refinancing a home, I would.... Lock 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 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 2009