Daily Rate Lock Recommendation

Thursday's bond market has opened in positive territory following the release of favorable economic reports. The stock markets are showing gains with the Dow up 44 points and the Nasdaq up 17 points. The bond market is currently up 15/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.Both of this morning's important releases gave us favorable results. Even weekly unemployment numbers that are not considered highly important came in weaker than expected. The Labor Department said that 626,000 new claims for benefits were filed last week. This was the largest weekly filing since October 1982 and helps support the theory that tomorrow's monthly employment report will show bleak numbers.The two more important reports were December's Factory Orders and 4th Quarter Productivity numbers. The factory orders data showed a larger than expected drop of 3.9% in new orders. This was the fifth consecutive mo nthly decline in orders, which is a first for the report. Analysts were expecting to see a decline of 3.0%, meaning manufacturing activity is slower than thought. In addition, today's report also revised November's decline in orders from 4.6% to 6.5% that is now the largest monthly decline since July 2000.The 4th Quarter Productivity and Costs data was the third piece of news posted this morning. It showed a surprising jump of 3.2% in worker output. This was more than double what analysts had expected, meaning workers were more productive in each hour worked last quarter. This is good news for the bond market and mortgage rates.Tomorrow morning brings us the release of the almighty Employment report. It will give us the unemployment rate, number of jobs lost or added to the economy last month and average hourly earnings. Analysts are expecting it to show that the unemployment rate jumped 0.3% to 7.5% last month while 500,000 jobs were lost. The average earnings reading is expected to show that earnings rose 0.3%. A higher unemployment rate and larger job loss would be considered favorable news for the bond market and mortgage pricing. If we do get favorable results, I would expect to see bonds rally and mortgage rates fall tomorrow.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