Our Real Estate Blog

Mortgage Rates (8/31/2010)

September 2nd, 2010 8:09 AM by Lehel S.

Tuesday's bond market has opened in positive territory despite stock gains and stronger than expected economic data. The stock markets are reacting favorably to this morning's only important data with the Dow currently up 40 points and the Nasdaq up 7 points. The bond market is currently up 14/32, which should improve this morning's mortgage rates by approximately .250 of a discount point. 

August's Consumer Confidence Index was posted late this morning. The Conference Board announced a reading of 53.5 that was an increase from last month's reading and higher than analysts' forecasts. That is considered bad news for the bond market and mortgage rates because it means consumers may be more apt to make large purchases in the near future, fueling economic growth.

Later today, the minutes from the last FOMC meeting will be posted. 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. But this is one of those events that can cause significant movement in rates after its release or be a non-factor. I suspect that this particular release will cause a little movement in bond prices, but not enough to significantly affect mortgage pricing. 

Tomorrow's only important news is the release of the Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET. This index measures manufacturer sentiment and is expected to show 52.9, which would be a decline from last month's reading of 55.5. A reading above 50 means that more surveyed manufacturers felt business improved during the month than those who felt it worsened. A larger than expected decline in the index would likely cause selling in the stock markets and lead to an improvement in mortgage rates tomorr ow.

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. 
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Posted by Lehel S. on September 2nd, 2010 8:09 AM

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