September 25th, 2009 9:15 AM by Lehel Szucs
Friday's bond market has opened flat following the release of mixed economic new. The stock markets are showing minor losses with the Dow down 14 points and the Nasdaq down 10 points. The bond market is currently up 2/32, which will likely improve this morning's mortgage rates by approximately .125 due to strength late yesterday after news that the 7-year Note sale went pretty well.
There were three reports posted this morning. Results of two of them can be considered negative for bonds and mortgage rates while one is good news. Since the most important one gave us much weaker than expected results, we have not seen much selling in bonds, preventing an increase mortgage pricing.
The Commerce Department gave us August's Durable Goods Orders early this morning. They reported a 2.4% decline in new orders for big-ticket items at U.S. manufacturers. This was far short of analysts' forecasts of a 0.5% increase and indicates that the manufacturing sec tor is weaker than expected. This is good news for bonds and mortgage rates.
The second report came from the University of Michigan who posted their revised Index of Consumer Sentiment for September. They announced a 73.5 reading that was well above the preliminary reading earlier this month and current forecasts. That means surveyed consumers were more optimistic about their own financial situations than many had expected. This is considered negative news for bonds because its hints that consumers may be more willing to make large purchases in the near future, fueling economic growth.
The third and final report of the week was August's New Home Sales. The Commerce Department said that sales of newly constructed homes rose last month, but at a slower pace than analysts had forecasted. The increase in sales points toward housing sector growth that is bad for bonds and mortgage rates. The fact that it fell short of expectations is actually good for b onds but many had hoped for a decline in sales such as yesterday's Existing Home Sales report revealed.
Next week is extremely busy in terms of economic release. There is no relevant data scheduled for release Monday, but there are reports being posted every other day of the week with some days having multiple reports scheduled. And some of the reports on next week's calendar are considered to be extremely important to the markets. Look for more details on next week's events in Sunday's weekly preview.
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/an y other borrowers.
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