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Mortgage Rates (8/26/2008)

August 26th, 2008 11:05 AM by Lehel Szucs

Tuesday's bond market has opened in fairly flat following the release of mixed economic news. The stock markets are also relatively calm with the Dow up 20 points and the Nasdaq nearly unchanged. The bond market is close to yesterday's closing level, which should keep this morning's mortgage rates unchanged from yesterday.

The more important of today's two releases was the Conference Board's Consumer Confidence Index (CCI) late this morning. It showed a reading of 56.9 that was higher than forecasts had called for. This means that consumer sentiment was stronger this month than thought, which is bad news for bonds and mortgage rates.

July's New Home Sales data was also posted this morning, revealing fewer home sales than analysts had thought. This indicates that the new construction portion of the housing industry continues to weaken. However, this data is not considered to be of high importance to the markets or mortgage rates.

The final release of the day is the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members. It will be interesting to see some of the Fed member's views on the economy and inflation and if they will hint what the Fed's next move may be. If mortgage rates will be influenced by this, it will come during late afternoon trading.

The Commerce Department will post July's Durable Goods Orders tomorrow morning, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big ticket items, or products that are expected to last three or more years. A weaker reading than the expected 0.1% rise that is expected would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

If I were considering fi nancing/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.


©Mortgage Commentary 2008

Posted in:General
Posted by Lehel Szucs on August 26th, 2008 11:05 AM

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