Friday’s bond market has opened in negative territory with stocks showing
early gains. The Dow is currently up 41 points while the Nasdaq has gained
22 points. The bond market is currently down 8/32, which will likely push
this morning’s mortgage rates higher by approximately .125 - .250 of a
discount point over yesterday’s early pricing.
What was supposed to be a key day for the financial and mortgage markets is
actually a dud because the government shutdown has prevented the release of
September’s Employment report. That left nothing to drive bond trading or
influence mortgage rates, leaving a direct pattern between stock strength
and bond weakness. If the major stock indexes remain near current levels
the rest of the day, I expect mortgage rates to follow suit.
I would not be surprised to see some progress out of Washington this
weekend, but not a complete resolution. As we get closer and closer to the
date of October 17 when the government will supposedly run out of money to
pay bills, one side of the isle is likely to blink. I don’t believe that it
really matters which one does in terms of an impact on mortgage rates.
However, just the fact that a resolution becomes a possibility should cause
movement in the markets and mortgage rates. Unfortunately, I don’t think
that will necessarily be good news for mortgage shoppers, at least not in
the immediate reaction. Therefore, please proceed cautiously if still
floating an interest rate and are scheduled to close in the next week or
so.
Next week has some important economic data scheduled for release (Producer
Price index and Retail Sales data) along with the FOMC minutes and two
Treasury auctions of long-term securities that tend to affect mortgage
rates. Obviously, most of that is on standby until Congress decides to play
nice with each other and the U.S. government reopens for business. Let’s
see what happens over the weekend and if any progress actually is made.
Look for details in Sunday evening’s weekly preview on what the week will look
like based on weekend events that took place thus far. It would be another
dull and boring week or we may be back in business and playing catch-up
with this week’s data also.
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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