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Daily Rate Lock in AZ!

Wednesday's bond market has opened in positive territory following the release of weaker than expected economic news and early stock losses. The stock markets are posting sizable losses with the Dow down 108 points and the Nasdaq down 25 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.

The Commerce Department reported this morning that new orders durable goods, or products with a life expectancy of at least three years, fell 1.7% last month. This was much lower than the 0.8% increase that was forecasted and indicates that the manufacturing sector is weaker than some had expected. This is good news for bonds and mortgage rates because a weakening manufacturing sector threatens overall economic growth. This in turn eases inflationary concerns and makes long-term investments such as mortgage related bonds more attractive to investors.

February's New Home Sales figures were also released this morning. They showed a higher level of sales of newly constructed homes than was expected, however, today's release also revised January's sales higher than previously announced. This brought the month to month decline in line with forecasts. Accordingly, this news has had little impact trading or mortgage rates.

Tomorrow brings us the final revision to the 4th Quarter GDP. This is the second and final revision to January's preliminary reading and is expected to show no change from the 0.6% reading that was posted last month. Analysts are now more concerned with next month's preliminary reading of the 1st quarter than data from three to six months ago, so I don't expect this report to affect mortgage rates.

There are two relevant reports scheduled for release Friday. The first is February's Personal Income & Outlays report. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market because of the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative affect on the bond market and mortgage rates. Current forecasts are calling for a 0.3% rise in income and a 0.1% rise in spending.

The second report comes from the University of Michigan at 9:45 AM ET. Their revision to the March consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend just asyesterday's Consumer Confidence Index did. It is expected to show a small decline from the previous reading of 70.5.

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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

Posted by Mike Martell - RE/MAX Integrity Glendale, AZ on 03/26/2008 11:57 AM

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