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Friday's bond market has opened down slightly despite early stock losses and a weaker than expected consumer sentiment reading. The stock markets are reacting to earnings news with the Dow down 87 points and the Nasdaq down 30 points. The bond market is currently down 4/32, which should push this morning's mortgage rates higher by approximately .125 of a discount point.
Today's only economic data was the University of Michigan's update to their Index of Consumer Sentiment for April. It showed a reading of 62.6 that was lower than forecasts. This is considered good news for bonds since it indicates consumers may be less apt to spend than previously thought, but since it is a revision it is considered only moderately important to the markets.
I am expecting a fairly quiet day in the bond market and mortgage rates. If any revisions were to come today, they would most likely be as a result of further stock weakness or a rebound in the stock indexe s. As long as they remain near their current levels, we should see mortgage rates follow suit the rest of the day.
Next week is extremely busy in terms of economic releases and related events. Monday is the only day of the week that there is not important economic data scheduled for release. We also have another FOMC meeting on the calendar, meaning we will see plenty of volatility in the markets next week. 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... 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.
©Mortgage Commentary 2008
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