August 5th, 2008 8:51 AM by Lehel Szucs
Tuesday's bond market has opened in negative territory due to early stock gains. The stock markets are off to a strong start with the Dow up 165 points and the Nasdaq up 30 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point over yesterday's morning rates.
There was no relevant economic news posted this morning. Stock traders are showing their optimism in the economy following another decline in oil prices. High fuel costs have been noted by many sources as a contributing factor to the slowing economy. As oil prices fall well off their recent highs, that concern seems to be easing. This leads to better expectations for economic activity and corporate earnings.
Today's FOMC meeting will adjourn at 2:15 PM ET and is expected to bring no change to key interest rates. If that is indeed the result, I expect top see little reaction in the markets . However, the post-meeting statements seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Accordingly, we may still see some volatility in the markets and possibly mortgage pricing during afternoon hours even if the Fed leaves interest rates alone.
Look for an update to this report after the markets have an opportunity to react to the news.
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.
©Mortgage Commentary 2008