Monday’s bond market has opened in positive territory, erasing part of
Friday’s intra-day losses. The stock markets are mixed with the Dow down 7
points and the Nasdaq up 4 points. The bond market is currently up 6/32,
but due to significant selling Friday afternoon, we will still see an
increase of approximately .250 of a discount point if comparing to Friday’s
morning pricing. If your lender made a sizable increase to rates Friday
afternoon, you should see little change in this morning’s pricing or
possibly even an improvement, depending on how much of an upward revision
was made.
There is nothing of relevance scheduled for release today that has the
potential to influence mortgage rates. The rest of the week brings us the
release of three reports that do, in addition to the minutes from the most
recent FOMC meeting and a congressional speaking engagement by Fed Chairman
Bernanke. Only one of the economic reports is considered to be highly
important to the markets and mortgage rates, but the others do carry enough
significance to influence mortgage rates if they show a wide variance from
forecasts.
Tomorrow also has nothing of importance scheduled, so look for stock
movement to heavily influence bond trading and mortgage rates. Stock gains
will probably pressure bonds and cause mortgage rates to move higher. If
the major stock indexes show losses during the first couple days, we may
see bonds thrive and mortgage rates remain unchanged or move slightly lower.
It will also be interesting to see if last week’s pattern of afternoon
selling in bonds carries into this week. Early gains in bonds this morning
raises caution that it may. Therefore, proceed cautiously if still floating
an interest rate and closing in the immediate future as the afternoon
selling, for the most part, has been stronger than the morning buying. In
other words, the afternoon revisions have been higher than the morning
improvement s to rates.
Wednesday has three events that could affect mortgage rates. They include
April’s Existing Home Sales report and Fed Chairman Bernanke’s appearance
in front of Joint Economic Committee of Congress, both at 10:00 AM ET. That
will be followed by the release of the minutes from the last FOMC meeting at
2:00 PM ET.
Overall, I believe Wednesday will be the most important day of the week for
mortgage rates, although Friday should be active also as it has the most
important economic report and will have an early bond market closing ahead
of next Monday’s holiday. I don’t think we will see as much movement in
rates that we saw last week, however, it is still recommended to maintain
contact with your mortgage professional if you have not locked an interest
rate yet since it could still be a fairly active week.
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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