August 25th, 2008 8:39 AM by Lehel Szucs
Friday's bond market has opened in negative territory following a strong open in stocks. The stock markets are posting sizable gains during morning trading with the Dow up 180 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.
There is no relevant data scheduled for release today, but Fed Chairman Bernanke did make a speech this morning at a conference in Wyoming. In it he implied that the problems in the credit markets may not be over and that they will continue to affect the economy. He added that the drop in oil prices was encouraging and should help ease inflation concerns.
Generally speaking, his words did not come as a surprise to many. They did however, help some to push back their estimated date of a Fed rate increase. Many had predicted the Fed would raise rates sometime this fall to help control inflationa ry pressures, but now feel that the increase may not come until the first half of next year. But, today's negative open in bonds is more a result of the stock gains than his speech.
Next week has a fairly busy calendar with economic data scheduled for release each day. None of the reports are considered to be extremely important, but a couple of them are important enough to affect mortgage rates if their results differ from forecasts. The week starts off fairly light with July's Existing Home Sales report late Monday morning. It is one of the least important reports of the week, but since it is the only one scheduled for that day we may see enough of a reaction in the markets to affect mortgage pricing if it varies greatly from forecasts.
It appears there are seven reports scheduled for release next week that are worth watching, in addition to the minutes from the last FOMC meeting. Look for more details on next week's events in Sunday's weekly p review.
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.
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