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Monday’s bond market has opened in positive territory following early
stock weakness and softer than expected housing news. The major stock
indexes are showing early losses with the Dow down 67 points and the
Nasdaq down 3 points. The bond market is currently up 6/32, which should
improve this morning’s mortgage rates by approximately .125 - .250 of a
discount point.
The National Association of Realtors gave us March's Existing Homes Sales
numbers late this morning. Analysts were expecting to see small increase
sales of previously owned homes, but today’s report showed a small
decline in sales. That makes the data favorable for the bond market and
mortgage rates. Unfortunately though, this report is not considered to be
one of the more important reports we get each month, so its impact on
today’s trading and mortgage pricing has been fairly minimal.
Tomorrow’s only economic data will be March's New Home Sales at 10:00 AM
ET. It is similar to today’s report , but tracks a much smaller portion
of all home sales. It also gives us an indication of housing sector
strength and future mortgage credit demand as today’s Existing Home Sales
report did, however, it is the week's least important report. Unless it
varies greatly from analysts' forecasts, I am not expecting the data to
cause much movement in mortgage rates. Analysts are currently forecasting
an increase in sales of newly constructed homes.
Overall, look for a fair amount of movement in the financial markets and
mortgage rates this week. Friday is the most important day due to the
GDP, but we should see movement in rates several days, particularly days
that stocks are active. Tomorrow appears to be the best candidate for the
quietest day for mortgage rates. If this week's reports reveal weaker
than expected economic conditions, the bond market could extend its
recent rally and mortgage rates should fall for the week. However, I
recommend taking a cautious approach towards rates if still floating an
interest rate 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... 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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