Another view of todays market

Tuesday’s bond market has opened down slightly even though this morning’s only economic data gave us favorable results. The stock markets are showing small losses with the Dow down 4 points and the Nasdaq down 10 points. The bond market is currently down 4/32, which will likely push this morning’s mortgage rates slightly higher than Friday’s morning levels. The financial and mortgage markets were closed yesterday in observance of the Martin Luther King Jr. holiday.

The National Association of Realtors gave us today’s only relevant economic data late this morning. They announced that home resales slipped approximately 1.0% last month, falling short of the 1.0% increase that was forecasted. This means that the housing sector was a little softer last month than many had thought. Since a weakening housing sector makes a broader economic recovery less likely anytime soon, we can consider this data good news for the bond market and mortgage rates. However, it was a minor variance in a moderately important report, so it has not had that much of an impact on today’s mortgage pricing.

The rest of the week brings us the release of only two more pieces of monthly economic data for the markets to digest, but neither of those is considered to be highly important for mortgage rates. There is nothing of relevance scheduled for release tomorrow, so look for stock strength or weakness to help drive bond trading and mortgage rates. If stocks show noticeable losses, bonds should benefit, possibly leading to slightly lower mortgage rates. On the other hand, stock strength should pressure bonds and mortgage pricing tomorrow.

The next piece of data that has the potential to influence mortgage rates doesn’t come until Thursday morning. Also worth mentioning are more key corporate earnings reports that are scheduled for release this week. Just a few of the big names scheduled to report over the next several days include Apple, IBM and Google. If corporate earnings are softer than expected, stock prices could fall, leading to bond strength and lower mortgage rates. However, good news in those earnings releases could extend the recent stock rally, drawing funds away from bonds. The latter would likely cause mortgage rates to move higher this week. I am holding the short and mid-term lock recommendations for the time being, but am prepared to shift to a less conservative position if the major stocks indexes start to move lower.



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...