Delaware Mortgage Rate Update for Friday January 27, 2012 by John R. Thomas from Primary Residential Mortgage.
Friday’s bond market initially opened in positive territory again following weaker than expected results from some key economic data, but it has since given back most of those gains. The stock markets are having a negative reaction to the same news, with the Dow down 62 points and the Nasdaq down 2 points. The bond market is currently up 1/32, which should lead to an improvement in this morning’s Delaware mortgage rates of another .125 - .250 of a discount point.
Today’s major news was the initial reading of the 4th Quarter Gross Domestic Product (GDP) that came in at up 2.8% instead of the 3.2% that was expected. Since the GDP is considered to be the best indicator of economic strength or weakness, we can consider this news favorable for bonds and mortgage rates. The 2.8% pace means that the economy did not grow as much as many had thought during the last three months of the year. Since the bond market tends to thrive in weaker economic conditions, this is welcomed news for mortgage rates.
Also released today was the University of Michigan's revision to their Index of Consumer Sentiment for January. It showed a reading of 75.0, exceeding forecasts of 74.2. This means that surveyed consumers were more optimistic about their own financial situations this month than previously thought, making the data negative for bonds and mortgage rates. This is because consumers are more likely to make large purchases when they feel more comfortable about their own job and finances. Worth noting though is that this data is much less important to the markets than this morning’s GDP reading was.
Next week is another busy one, but it has more economic releases than other events. There is economic data scheduled for release every day of the week that may influence bond trading and mortgage pricing. It begins with December’s Personal Income and Outlays report early Monday that measures consumer ability to spend and current spending habits. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.
The remainder of the week brings us several important reports, including Wednesday’s ISM index and Friday’s almighty Employment report. Accordingly, it is likely to be another active one for the mortgage market. Look for details on next week’s events in Sunday’s weekly preview.
If I were considering purchasing or refinancing a home in Delaware, 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... This is only my opinion of what I would do if I were financing a home in Delaware. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
John R. Thomas
Certified Mortgage Planner - NMLS 38783
Primary Residential Mortgage
248 E Chestnut Hill Rd
Newark, DE 19713