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Mortgage Rates (8/21/2008)

August 21st, 2008 3:08 PM by Lehel Szucs

Thursday's bond market has opened in negative territory despite stock weakness and weaker than expected economic data. The stock markets are posting losses with the Dow down 72 points and the Nasdaq down 21 points. The bond market is currently down 6/32, but we will likely still see an improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength late yesterday.

Neither of today's economic reports were considered to be highly important to the markets. The Labor Department said that 432,000 new claims for unemployment benefits were filed last week. This was a little lower than expected, but not enough of a difference to affect trading or mortgage rates because the figures cover only a single week.

The Conference Board gave us some favorable news with the release of their Leading Economic Indicators (LEI) for July. Today's posting showed a drop of 0.7% in the indicators, which was a much bigger drop than ma ny had expected. This means that economic activity is expected to slow rather quickly in the next three to six months. That eases inflation concerns and helps keep mortgage rates lower.

There is no relevant data scheduled for release tomorrow, leaving the stock markets to be the biggest influence on bonds. Fed Chairman Bernanke will be making a speech at a Kansas City Fed gathering at 10:00 AM tomorrow. There is no question and answer period expected, but if Mr. Bernanke does say anything that hints at the Fed's next move, the markets may react accordingly. However, I suspect that this speech will not be a market-mover.

If I were considering financing/refinancing a home, I would.... Float 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 wh at 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

Posted in:General
Posted by Lehel Szucs on August 21st, 2008 3:08 PM

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