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Monday's bond market has opened in negative territory following early stock gains. The Dow is currently up 71 points while the Nasdaq has gained 9 points. The bond market is currently down 3/32, but we will likely still see a slight improvement in rates as a result of strength in bonds late Friday.
This week will be interesting for the bond market and mortgage rates. There are six economic reports scheduled for the financial and mortgage markets to digest, with all of them scheduled for the middle or latter part of the week. In addition, one of the reports is considered to be of extremely high importance to the financial and mortgage markets. This makes it quite possible that mortgage rates will show noticeable movement again this week.
The week's data is begins Wednesday June's Existing Home Sales. This is the first of two housing sector related reports scheduled for release this week. June's New Home Sales will be posted Thursday morning, but I don't think either will have much of an impact on the bond market or mortgage rates. I am expecting that the other reports will drive bond trading and mortgage pricing much more than these will.
The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. With Fed Chairman Ben Bernanke's testimony last week, I don't think we will see any significant surprises in this report, and therefore will likely not cause much movement in mortgage rates Wednesday afternoon.
Overall, this is another fairly significant week for the bond market and mortgage rates. If we get weaker than expected economic results, we may see mortgage rates make another leg lower. However, stronger than expected results will likely lead to higher rates for the week. With the bond market just recently falling below the important 5.000% threshold, I am holding the float recommendations, but if the yield does not continue to move lower, I likely will be shifting to a lock recommendation.
If I were considering financing/refinancing a home, I would.... Float 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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2007
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