Daily Mortgage Rate Advice

Friday's bond market has opened well in negative territory despite the release of weaker than expected results in today's only economic news. The stock markets are flat during early trading with the Dow up 2 points and the Nasdaq is up 4 points. The bond market is currently down 20/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

The University of Michigan Index of Consumer Sentiment was today's only relevant data on the schedule. It showed a reading of 56.2 that was well below forecasts of 60.2. This indicates that consumers were much less optimistic about their own financial situations than analysts had expected. That is good news for bonds and mortgage rates because it usually means that consumers are less likely to make large purchases in the near future.

Today's weakness is due to attention turning back to the amount of debt expected to be brought to market to fund the economic stimulus package that is being considered by Congress. With an approval seeming like a good possibility, the potential new supply for government debt has traders concerned.

Also contributing to this morning's weakness may be an expectation of a stock rally once the approvals are announced. That would create a scenario that makes stocks more appealing to investors and lead to a shift in funds from bonds to stocks. It appears that the selling in bonds may be in part a move by some traders as an effort to get back into stocks if the plan is approved.

There is an early close in the bond market today ahead of Monday's President's Day Holiday, but I don't think it will negative affect bonds or mortgage rates today. The financial markets will be closed Monday and will reopen Tuesday for normal trading hours.

Next brings us the release of a couple of important reports including two key inflation readings. None of the important data is scheduled for release Tuesday, but 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... 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 interest 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.