July 22nd, 2008 12:26 PM by Lehel Szucs
Tuesday's bond market has opened in negative territory as investors remain concerned about inflation sensitive securities. The stock markets are mixed with the Dow up 34 points and the Nasdaq down 4 points. The bond market is currently down 13/32, but due to strength in bonds late yesterday we will likely see little change in this morning's mortgage rates.
There is no relevant economic data scheduled for release today or tomorrow morning. This will leave the bond market and mortgage rates to be influenced by stock and oil prices. This could further pressure bonds in my opinion, so please proceed cautiously if still floating an interest rate. I would not be surprised to see an upward revision to mortgage pricing later today if bonds remain near current levels.
The Federal Reserve will release its Beige Book report tomorrow afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when de termining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. With Fed Chairman Ben Bernanke's testimony last week, I don't think we will see any significant surprises in this report, and therefore will likely not cause much movement in mortgage rates tomorrow afternoon.
There are two housing sector related releases scheduled for Thursday and Friday, but I don't think they will have much of an impact on the bond market or mortgage rates. June's Existing Home Sales will be posted Thursday while New Home Sales will be released Friday. I would expect that other reports or factors will drive bond trading and mortgage pricing much more than these will.
We also have a 5-year Treasury Note auction Thursday that may influence bond trading but will also give us an indication of investor appetite for bonds. Generally speaking, despite the lack of a data-packed calendar, I would still maintain con stant contact with your mortgage professional.
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 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