Monday's bond market has opened in negative territory following early stock gains and stronger than expected housing news. The Dow is currently up 94 points while the Nasdaq has gained 15 points. The bond market is currently down 18/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.
The only economic data released this morning was January's Existing Home Sales report. The National Association of Realtors releases this data that tracks home resales in the U.S. It showed a slight drop in sales, but not nearly as much of a drop that analysts had expected. With this being today's only news, it has had a moderate impact on today's bond trading and mortgage rates.
The first big report of the week will be released early tomorrow morning when we will see the Labor Department's Producer Price Index (PPI) for January. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, fears of inflation may rise, hurting bond prices and leading to higher mortgage rates tomorrow morning. However, a smaller than expected increase or better yet a decline in core prices would be good news for the bond market and mortgage rates. It is expected to show an increase of 0.4% in the overall reading and a 0.2% rise in the core data.
Also tomorrow morning is the release of February's Consumer Confidence Index (CCI). This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected t o show a decline in confidence from 87.9 in January to 82.5 this month.
Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either tomorrowor Wednesday, but several of the week's reports can cause movement in rates. This would be a good week to maintain contact with your mortgage professional.
If I were considering financing/refinancing a home, 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. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
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