Tuesday's bond market has opened in positive territory as stocks show another round of losses. The stock markets are again posting early weakness with the Dow down 91 points and the Nasdaq down 17 points. The bond market is currently up 6/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.
September's Industrial Production report was released mid-morning today, revealing a 0.1% rise in output at U.S. factories, mines and utilities. This matched forecasts and has not had much of an impact on the markets this morning.
Tomorrow brings us three events to watch. The first is September's Consumer Price Index (CPI) at 8:40 AM ET. This index measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.2% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading could raise inflation concerns in the bond market and push mortgage rates higher tomorrow. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates tomorrow.
Also scheduled for release is September's Housing Starts. It is the week's least important piece of data and us ually doesn't have much of an impact on the bond market and mortgage rates. It does give us an indication of housing sector strength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a sizable decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.
The Fed Beige Book will be released tomorrow afternoon. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If the 2:00 PM ET release reveals stronger signs of inflation and economic activity from the last release, we could see mortgage rates revise higher during afternoon trading.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my clo sing 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.
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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