August 27th, 2008 10:52 AM by Lehel Szucs
Wednesday's bond market has opened in negative territory following a much larger than expected jump in durable goods orders. The stock markets are showing gains with the Dow up 62 points and the Nasdaq up 12 points. The bond market is currently down 6/3l, but we will likely see this morning's mortgage rates improve slightly due to strength in bonds late yesterday.
Yesterday's FOMC minutes release indicated that the Fed does not feel interest rates are too low, keeping open the possibility of more rate cuts to stimulate economic activity in the future. However, this likely could only come if inflationary pressures eased enough for the Fed to feel comfortable with the move. But, the minutes did indicate a rake hike is more likely to be the next move than a possible reduction to key short-term interest rates.
The Commerce Department gave us July's Durable Goods Orders this morning, saying that new orders for big-ticket items rose 1.3% last month. This was much higher than analysts had expected and indicates that the manufacturing sector was stronger than thought last month. This is generally bad news but this data can be quite volatile from month to month so its impact on rates this morning has been fairly minimal.
Thursday's only data is the first revision to the 2nd Quarter Gross Domestic Product (GDP). Last month's preliminary reading revealed a 1.9% pace of growth. A smaller than expected upward revision should help lower mortgage rates Thursday, especially if the inflation portion of the release does not get revised higher. Current forecasts are calling for a 2.7% annual rate. There will be a final revision issued next month, but it probably will have little impact on mortgage rates.
The Labor Department will post weekly unemployment claims numbers tomorrow morning also. Analysts are expecting to see 425,000 new claims, which would be a decline from the previous week.
If I we re 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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