Market Update - Lock or Float (September 28)

Hey Everyone,

I apologize for being so late with this!  I was working a Fairground today (and surprisingly picked up a lot of business)!  Anyway, here is the usual market update!  The lock advisory hasn't really changed all too much from yesterday.

Friday's bond market has opened in positive territory despite stronger than expected economic news. The stock markets have fallen into negative territory with the Dow down 28 points and the Nasdaq down 7 points. The bond market is currently up 7/32, which with yesterday's late rally should improve this morning's mortgage rates by approximately .250 - .375 of a discount point.

The first of today's two reports was August's Personal Income and Outlays data. It showed that personal income rose 0.4%, as expected. The negative news came from the outlays portion of the report that revealed a 0.6% rise in personal spending. This is important because consumer spending makes up two thirds of the U.S. economy. Strong levels of spending leads to inflation concerns and usually hurts bonds prices and cause mortgage rates to move higher. Fortunately, the market has taken the news in stride and continues the upbeat momentum from yesterday.

The second report of the day was the University of Michigan's Consumer Sentiment Index for September. This index measures consumer confidence and showed a reading of 83.4. This was lower than the 84.0 reading that was forecasted, which can be considered good news for bonds and mortgage rates. The weaker than expected level of confidence is thought to mean that consumers are less likely to make large purchases in the immediate future. This could help limit economic activity and ease inflation concerns.

Next week brings us the release of only a couple of pieces of economic news, but all of them can be considered to be important to the markets. They begin Monday with the release of the ISM manufacturing index Monday morning and conclude with the almighty Employment report Friday morning. In between, the schedule is light. But look for more details on next week's events 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... 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.

*Information can be found on my website: http://www.family-home-loans.net/DailyRateLockAdvisory

*Information supplied by a la mode, inc.