Our Real Estate Blog

Mortgage Rates (8/18/2010)

August 19th, 2010 10:53 AM by Lehel S.

Wednesday's bond market has opened in positive territory with the stock markets mixed during morning trading. The Dow is posting a loss of approximately 20 points while the Nasdaq is up 3 points. The bond market is currently up 7/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

There is no relevant economic data scheduled for release today. This leaves the bond market and mortgage pricing to the influence of the stock markets. If the major stock indexes move lower this afternoon, the bond market should improve and mortgage pricing could improve. But, if stock markets improve noticeably from current levels, we may see an upward revision to rates later today.

Last week's unemployment figures will be released early tomorrow morning. The Labor Department is expected to say that 475,000 new claims for unemployment benefits were filed last week. Since this report tracks only a single week's worth of n ew claims, its impact on the markets and mortgage rates is usually minimal. The higher number of claims the better the news will be for bonds. However, it will likely take a wide variance from forecasts to see this data affect mortgage rates tomorrow.

The Conference Board will give us its Leading Economic Indicators (LEI) for July late tomorrow morning. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates. It is expected to show an increase of 0.2 % in the index, indicating minor economic growth over the next c ouple of months.

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. 
Posted in:General
Posted by Lehel S. on August 19th, 2010 10:53 AM

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