Daily Mortgage Rate Lock Advice

Rate Lock Advisory - Monday Mar. 9th

Monday's bond market has opened in negative territory following early stock gains. However, stocks have given back those gains to currently stand close to Friday's closing levels. The Dow is currently up 4 points while the Nasdaq is nearly unchanged. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.

There is no relevant economic data scheduled for release today. The rest of the week brings us the release of three economic releases for the bond and mortgage markets to digest along with 10-year Treasury Note and 30 year Bond auctions. All of the data will be posted the latter part of the week. Only one of the three reports is considered to be of high importance to the markets, but this does not mean that we can expect to see a quiet week in mortgage rates. We could very well see the most movement in rates the latter part of the week, but rates are likely to move several days this week.

The most important of the three reports will be posted Thursday morning when February's Retail Sales data is released. This report is extremely important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, data that is related usually has a big impact on the financial markets. This month's report is expected to show a decline in sales of approximately 0.4%. If it reveals a larger decline in sales, the bond market should rise and mortgage rates will likely fall. If it reveals an increase, I expect to see bond prices fall and mortgage rates rise Thursday morning.

Overall, it will likely be another active week in the mortgage market. Thursday will probably be the most important day of the week with the Retail Sales report due. The 10-year Treasury Note auction is scheduled for Wednesday while the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading, however, weak demand could lead to selling and an increase to mortgage rates. But I am expecting to see the most movement in rates the latter part of the week regardless of the auction results.

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.