July 20th, 2008 2:04 PM by Lehel Szucs
Friday's bond market has opened well in negative territory as investors continue to shy away from inflation-threatened securities. The stock markets are mixed during morning trading with the Dow up 38 points and the Nasdaq down 23 points. The bond market is currently down 21/32, which will likely push this morning's mortgage rates higher by another .375 of a discount point.
There is no relevant economic data scheduled for release today, but this morning's bond losses don't come as a surprise. It appears that the sentiment in the bond market has turned more pessimistic than optimistic, partly due to inflation concerns. That has led to bonds and long-term securities becoming of less interest to investors. The result is bond prices falling as they are sold and mortgage rates rising. Unfortunately, I am not so sure that this is the end of the selling, so please be careful if still floating an interest rate.
There are a couple of reports scheduled for release next week that are relevant to mortgage related bonds and rates. However, none are considered to be of extremely high importance to the markets. The first comes Monday morning with the release of June's Leading Economic Indicators (LEI). This report is considered to be moderately important to the markets.
The rest of the week brings is insight to housing sales, manufacturing activity for big-ticket items and the Fed Beige Book that breaks down economic activity in the U.S. by region. Look for more details on these and the rest of the upcoming 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... 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 fin ancing 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