Daily Mortgage Commentary

Greetings! Here's your Daily Commentary report compliments of Alan Russell & Princeton Capital! Call me today for current rates and market information at (650) 947-2296.           Friday’s bond market has opened in negative territory with stocks in positive ground. The Dow is currently up 71 points while the Nasdaq has gained 7 points. The bond market is currently down 3/32 (3.00%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point. There is no relevant economic data scheduled for release today, but there are a handful of speaking engagements from current Fed members. The first is scheduled for 10:15 AM ET and the last at 2:30 PM ET. None of them are considered to be highly important or likely to be market-moving, but whenever Fed Members speak publicly, particularly Chairman Bernanke, their words have the potential to heavily influence the markets. Chairman Bernanke is expected to speak in Philadelphia at 2:30 PM ET, so the best chance to see a noticeable reaction will come during afternoon trading. We seem to be stuck at 3.00% on the benchmark 10-year Treasury Note yield. It can’t seem to move too far away from that level but every time it breaks above, buyers push the yield back below. I still think we are more likely to see its yield move below 2.90% than break above and stay there though. Since mortgage rates tend to follow bond yields, moving lower is beneficial to mortgage shoppers. However, it is worth noting that there have been opportunities for the 10-year Note to fall below 2.95% during holiday trading. Unfortunately, we appear to be in a tight range of 2.95% to 3.00%, making it difficult to predict its next move. I am still comfortable with the optimistic stance on floating an interest rate, at least for the time being. That said, it would still be extremely prudent to watch the markets because a solid move above 3.00% is likely going to be very troublesome for rates. Next week doesn’t have too many reports scheduled that are expected to influence mortgage rates. There are only a couple reports worth watching, although one is the almighty monthly Employment report. This is an extremely important report that is highly influential on the financial and mortgage markets. The week’s schedule starts with November’s Factory Orders late Monday morning and concludes Friday morning with the Employment report. In between we have a report or two in addition to a couple Treasury auctions and the minutes from the most recent FOMC meeting. Look for details on next week’s activities in Sunday’s weekly preview. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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...       Alan Russell 161 South San Antonio Rd. | Los Altos, CA 95022 Ph: 650-947-2296 | Fax: 408-335-1118 alanrussell@princetoncap.com CLICK HERE TO STOP RECEIVING OUR REPORT