Mortgage Rate Advice

Rate Lock Advisory - Monday Mar. 30th





Monday's bond market has opened in positive territory following early stock losses. The stock markets are reacting heavily to the weekend news about GM and Chrysler's bailout requests. The result is the Dow down 283 points while the Nasdaq has lost 51 points. The bond market is currently up 7/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today. The week brings us the release of only four important reports beginning tomorrow, but three of those four are considered to be very important and one is arguably the single most important data we see each month.

The first is March's Consumer Confidence Index (CCI) late tomorrow morning. This index gives us an indication of consumers' willingness to spend. Bond traders watch this data closely because consumer spending makes up two-thirds of our economy. If this report shows that confidence is falling, it would indicate that consumers are more apt to delay making large purchases. If the report reveals that confidence looks to be growing, we may see bond traders sell, pushing mortgage rates higher tomorrow morning. It is expected to show a reading of 27.0 for March.

The Institute for Supply Management (ISM) will release their manufacturing index late Wednesday morning. This index gives us an important measurement of manufacturer sentiment by surveying trade executives. A reading below 50 means more surveyed executives felt business worsened during the month than those who said it had improved. This month's report is expected to show a reading of 36.0, which would be a slight increase from February's reading of 35.8. This means that analysts think business sentiment remained close to last month's level.

Overall, I expect to see the most movement in rates either Wednesday or Friday. Friday is the most important day of the week with the employment numbers being released, but we will likely see a fair amount of movement in rates Wednesday morning also. This will likely be a fairly active week for mortgage rates, therefore, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

If I were considering financing/refinancing a home, I would.... Float 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 2009

* Please note that if you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a rate renegotiation policy. Contact me for details.