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Tuesday’s bond market has opened in positive territory again with today’s
only economic data giving us somewhat favorable results and an uneventful
open in stocks. The major stock indexes opened mixed but fairly calm with
the Dow currently up 13 points and the Nasdaq down 4 points. The bond
market is currently up 12/32, which should improve this morning’s mortgage
rates by another .125 - .250 of a discount point over yesterday’s morning
pricing.
February's Housing Starts was posted late this morning, revealing a slight
increase in starts of new home construction. The number of new starts was
actually higher than expected, but an upward revision to January’s starts
meant that the increase from January to February was a weaker percentage
than was forecasted. That makes the data neutral or slightly favorable for
the bond market and mortgage rates. However, this was a small variance in a
relatively minor report, so its impact on today’s mortgage rates has been
minimal.
Tomorrow is the big day of the week in terms of expected volatility in the
financial and mortgage markets even though there are no relevant economic
reports scheduled for release. This is due to technically three different
Fed events taking place tomorrow afternoon. They start with the 2:00 PM ET
adjournment of the FOMC meeting that began today. It is widely expected
that Mr. Bernanke and company will not change key short-term interest rates
at this meeting, but there is rising concern in the market that the Fed may
cut back their current bond-buying program (QE3) to help ease future
issues. Any word on this topic either way could heavily influence the
markets and mortgage rates.
Also at 2:00 PM, the Fed will update their economic and monetary policy
projections. Any significant revisions to the Fed's outlook on
unemployment, GDP growth or their timetable for keeping key rates at
current levels will also cause volatility in the markets and mortgage
rates. This week’s FOMC meeting is one of those that will be followed by a
press conference with Fed Chairman Bernanke. The press conference will
begin at 2:30 PM and will probably lead to a fair amount of afternoon
volatility in the markets and mortgage rates.
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...
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