Wednesday's bond market has opened in negative territory after this morning's GDP report showed a much stronger reading than was expected. The stock markets are showing early gains with the Dow up 50 points and the Nasdaq up 12 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.
Today's release of the 3rd Quarter Gross Domestic Product (GDP) revealed a 3.9% annual pace of economic growth, exceeding forecasts of a 3.1% rate. This means that economic activity was moderately stronger than expected. However, offsetting that was good news in the key inflation reading within the report. It showed a significantly lower reading than was expected, indicating inflationary pressures were well under control. This is very good news for bonds and mortgage rates, but many traders are waiting for today's FOMC meeting before making any major moves.
Also posted this morning was the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. It showed a 0.8% that was slightly lower than forecasts. This can also be taken as good news for bonds and mortgage pricing because it eases wage inflation concerns.
The FOMC meeting will adjourn at 2:15 PM ET this afternoon. It is expected to bring a nother rate cut to key short-term interest rates. Assuming this does happen, traders will be looking at the post-meeting statement for any indication of the Fed's next move.
Look for an update to this report once the markets have had an opportunity to react to the FOMC meeting results.
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.
Please let me know if I can provide loan information for any of your clients. I would be happy to quickly pre-qualify them, provide loan scenarios, or help improve their credit position to obtain a lower interest rate.
I am here to provide you and your clients with exceptional service in a courteous and respectful manner.