Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Friday’s bond market has opened down sharply following stronger than expected housing news and a strong opening for stocks. The Dow is currently up 123 points while the Nasdaq has gained 23 points. The bond market is currently down 16/32, but I am not expecting to see much of a change in this morning’s mortgage rates due to strength in bonds late yesterday. This morning’s losses should simply erase yesterday’s afternoon gains, keeping mortgage pricing near yesterday’s morning levels.
The National Association of Realtors reported this morning that home resales rose 7.2% last month. This was nearly triple the increase in sales that was expected, indicating that the housing sector may be strengthening at a quicker pace than many had thought. While that is good news for homeowners, it is bad news for bonds because a strengthening housing sector makes a broader economic recovery more viable. Since bonds are more attractive to investors in a weaker economy environment, a strengthening economy can lead to higher mortgage rates.
Fed Chairman Bernanke is speaking this morning at a conference in Jackson Hole. I doubt that he will say anything new that will surprise the markets. The topic of the speech is the past year’s financial crisis. He may address future economic activity, but probably nothing that we have not already heard.
Next week is fairly busy in terms of economic reports scheduled for release in addition to more Treasury auctions. There is no relevant data due to be posted Monday, but Tuesday does bring us an important release. Look for 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
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