Wednesday's bond market has opened in negative territory despite weaker than expected economic news. The stock markets are posting sizable gains with the Dow up 80 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which should push this morning's mortgage rates higher by approximately .250 of a discount point.
The Commerce Department said that new orders for big-ticket items fell 4.9% last month. This was a larger drop than was expected, but this data can be quite volatile due to aircraft and transportation related orders. Still, the news is somewhat favorable to bonds and mortgage rates, but today's stock gains have prevented much interest in bonds.
There are two pieces of relevant economic news scheduled for release tomorrow. The first is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight decline from the previous estimate of a 4.0% annual rate.
The second is the release of August's New Home Sales. It is expected to show that sales of new homes fell in August. As was the case with Tuesday's Existing Home Sales data, this report will likely not have a significant impact on mortgage rates.
The Labor Department will also give last week's unemployment claim numbers, which are expected to come in at 320,000 new claims. Unless this figure varies greatly from forecasts, it will likely have little impact on tomorrow's mortgage pricing.
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... 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.
Please let me know if I can provide loan information for any of your clients. I would be happy to quickly pre-qualify them, provide loan scenarios, or help improve their credit position to obtain a lower interest rate.
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