Mortgage Market

Monday's bond market is currently down slightly after opening in positive territory. The stock markets are showing losses with the Dow down 24 points and the Nasdaq down 5 points. The bond market is currently down 3/32, but we should still see an improvement of approximately .250 of a discount point in this morning's mortgage rates as a result of strength late Friday.

This week brings us the release of only two reports that are may cause movement in mortgage rates. Neither of them are important enough to warrant much concern or attention. One is considered to be of moderate importance and the other is not likely to affect rates at all unless it varies significantly from forecasts.

The first piece of data comes tomorrow morning with the release of May's Housing Starts report. This report gives us a measurement of housing sector strength. It usually doesn't have a major impact on the bond market or mortgage rates and I see no reason for this month's results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.

May's Leading Economic Indicators (LEI) will be posted late Thursday morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher Thursday morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show an increase of 0.2%.

Overall, I suspect that it will be a relatively quiet week for mortgage rates. With little relevant economic data on tap and no major speeches by key Fed members, I am expecting the bond market to remain fairly calm. That is unless we see significant changes to the major stock indexes. I still believe that last week's sell off in bonds was overkill and we will continue to see bond yields ease lower, therefore am holding the current float recommendations.

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 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.