Our Real Estate Blog

Mortgage Rates (9/29/2010)

September 29th, 2010 11:39 AM by Lehel S.

Wednesday's bond market has opened relatively flat with little to drive trading this morning. The stock markets are basically following suit with the Dow down 10 points and the Nasdaq down 2 points. The bond market is down 3/32, but we should see little change in this morning's mortgage rates.

There is nothing of importance scheduled for release this morning, but we do have the 7-year Treasury Note auction taking place. Yesterday's 5-year Note sale went pretty well, so we can be optimistic that today's auction will follow suit. This would be good news for the bond market and mortgage rates because these Notes are closer to mortgage bonds than yesterday's 5-year Notes. If demand is strong again, meaning investors are still interested in longer-term securities, we should see bond prices rise and mortgage rates move lower during afternoon trading today.

Tomorrow does have some relevant economic data scheduled for release. The first is the final r evision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show no change from the previous estimate of a 1.6% increase in the GDP. It will take a fairly large revision for this data to move mortgage rates tomorrow.

Also tomorrow morning, the Labor Department will post last week's unemployment figures. They are expected to show that 457,000 new claims for unemployment benefits were filed, which would be a decline from the previous week. Since this data tracks only a single week's worth of new claims, it is not considered to be of high importance to the markets. If it shows a wide varianc e from forecasts, it can affect bond prices enough to change mortgage rates. But unless there is a fairly significant surprise, it will likely have little impact on tomorrow's mortgage pricing.

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. 
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Posted by Lehel S. on September 29th, 2010 11:39 AM

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