Mortgage Rate Advice

Rate Lock Advisory - Thursday Mar. 26th





Thursday's bond market has opened down slightly with stock posting early gains. The Dow is currently up 34 points while the Nasdaq has gained 23 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The final revision to the 4th Quarter GDP was posted this morning. It showed an annual pace of a 6.3% decline in the GDP during the last three months of the year. This was a little stronger than expected, but was a slight downward revision from last month's previous reading of down 6.2%. It also is the biggest quarterly decline in this reading since 1982. However, this data is quite aged now and has had little impact on this morning's trading.

The Labor Department gave us last week's unemployment claim figures this morning, saying that 652,000 new claims for benefits were filed last week. This was a hair higher than expected, but certainly not enough to influence today's mortgage rates.

Tomorrow morning brings us the release of two relevant reports. The first is February's Personal Income & Outlays report. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market because of the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative affect on the bond market and mortgage rates. Current forecasts are calling for a 0.1% drop in income and a 0.3% increase in spending.

The second report comes from the University of Michigan at 9:45 AM ET. Their revision to the March consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. It is expected to show little change from the previous reading that was posted two weeks ago.

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.