What the Markets Are Doing Today:
The bond and mortgage backed securities markets opened in slightly positive territory today while the stock markets opened in negative territory.
- The Dow opened down 13 points from yesterday's close
- NASDAQ opened down 15 points from yesterday's close
- The 10 Year Treasury Bond opened up 6/32 from yesterday's close
- FNMA 30 Year 4.0% coupon opened up 1/32 from yesterday's close
Remember, on MBSs, as the price goes up, the yield goes down - and mortgage interest rates go down with it. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. MBS closed up 10/32 from its opening on Friday and is currently flat against yesterday's close. I expect that today's mortgage rates will improve by 0.125 - 0.25 in discount points today.
Economic Reports Being Released Today:
- There are no economic reports scheduled for release today.
Important News of the Day:
Ben Bernanke, Chairman of the Federal Reserve, gave his testimony before the Joint Economic Committee this morning. He indicated that the economy will likely begin to recover later this year which will effectively end the recession. He also stated that an expansion of the economy will be slow and that unemployment may rise further. Overall, his testimony can be considered a cautiously optimistic outlook, and it didn't differ greatly from the predications of the analysts.
This week will be very light in terms of the number of economic reports that are scheduled for release. There are only two reports scheduled that are worth watching, but one of them is highly important to bonds and mortgage rates. Even though there are only two economic reports being releases this week, it could be an active week in the markets and mortgage rates due to the importance of the data that is being released as well as other events this week.
Look for more details on this week's economic data releases and events on my Weekly Mortgage Market Watch.
What Happening With Mortgage Rates Today:
Moderate Volatility. Look for plenty of movement in the financial markets and mortgage rates this week. If the reports being released this week reveal weaker than expected economic conditions, the bond markets may rally and mortgage rates could fall.
There's still continued downward pressure on MBS prices (which means higher yields and mortgage rates). The supply of bonds and T-bills on the market continues to weigh heavily on the market. The government expects to issue between $2.7 trillion and $4.2 trillion in bonds over the next two years to pay for the massive debt obligations. That in and of itself may give rise to the concerns for inflation.
No one knows how long rates will stay down this time or if they'll go any lower. If you haven't locked in a rate yet, then you may want to continue floating. While floating continues to make sense right now, the ever increasing massive government debt could soon drive mortgage rates up. So, if you like the rate that you are being offered today, then there's nothing wrong with locking in.
My Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock if my closing was taking place within 7 days
- Float if my closing was taking place within 8 and 30 days
- Float if my closing was taking place between 31 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 any or all other borrowers. See today's mortgage rates at www.LewCorcoran.com/RateSheet.
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