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Monday’s bond market has opened flat with nothing on the calendar today to
offset the overall tone in the market late last week. The major stock
indexes are mixed with the Dow down 25 points and the Nasdaq up 38 points.
The bond market is currently down slightly from Friday’s close, which
should keep this morning’s mortgage rates very close to Friday’s closing
levels- assuming that your lender revised higher Friday afternoon at least
once. If your lender did not post an intra-day upward revision sometime
Friday afternoon, you should see an increase in this morning’s pricing.
Today has nothing scheduled to drive bond trading and mortgage rates, so
look for the stock markets to be the biggest influence on bonds throughout
the day. If the major stock indexes move upward from their current levels,
we could see bond prices fall and mortgage rates move higher. This is
particularly true if the Dow moves into positive territory and above
15,000. However, if stocks retreat from current levels, we could see bond
prices rise and mortgage rates improve slightly during afternoon trading.
This week has little scheduled that is expected to drive bond trading and
mortgage rates. There are no relevant monthly or quarterly economic reports
on the calendar. In fact, the only economic news even worth watching is the
weekly unemployment update from the Labor Department that usually draws
little attention. We do, however, have two Treasury auctions that can
potentially affect rates the middle part of the week.
Overall, stock movement and Wednesday’s 10-year Treasury Note auction are
my focus points right now. Fed Chairman Bernanke’s speaking engagement
Friday morning could influence the markets, especially with such a light
schedule this week, but that is several days away. I don’t see anything
that stands out as crucial and had it not been for last Friday’s implosion,
this would have simply been labeled as a light week that would be ideal to
take a vacation.
That said, we do need to keep an eye on the markets because we may see a
calm week where the bond market stabilizes and regroups or we could see
another leg up in bond yields and mortgage rates. Unfortunately, I don’t
see a scenario this week that has bonds rallying and mortgage rates
dropping back to their levels of mid-last week. It wasn’t too long ago that
the benchmark 10-year Treasury Note yield was above 2.00% (currently at
1.75%), so we have plenty of room to move higher. Therefore, I strongly
recommend maintaining contact with your mortgage professional if you have
not locked an interest rate yet and closing in the near future.
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... Lock 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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