Market Update - Lock or Float (November 7)

Mortgage and Lending with Approved Mortgage Group NMLS #1287673

Well, folks, hopefully you tuned in to my blog on Friday or Monday where I suggested to lock your rates.  Here is what is going on in today's market:

The bond market opened this morning up 3/32 with the stocks down (Dow by 135 and Nasdaq by 30).  Because of this, you are probably seeing mortgage pricing similar to yesterday evening's.

The first report of the week was released today by the Labor Department.  The publication revealed worker productivity increased to 4.9% during this last quarter.  This is excellent news for bonds due to the fact that it is a much higher reading than anticipated.   There was also a mention about the unit labor costs decreasing which should take a little stress off the inflation concerns.  Even though that should be good news for bonds, they haven't reacted as anticipated because of the Treasury auction (mentioned below).

Today is the first of the two auctions for the 10-year Note sale. Scheduled for tomorrow is the 30-year Bond auction. We have already seen a shift in the bonds going up to 6/32 meaning a strong confidence level in the bond market where investors are moving their money from stocks to bonds.  Please keep an eye on this and the stock market throughout the rest of the day today, and I will do the same!

Bernanke will be presenting to the Joint Economic Committee tomorrow; this is regarding the U.S. economic outlook which could potentially cause a roller coaster ride in the market and potentially the mortgage pricing arena as well.

The next two reports aren't due until Friday morning (Goods and Services Trad Balance report, and the Consumer Sentiment report released by the University of Michigan).  The Goods and Services report is not very likely to have an effect on mortgage pricing/rates, but the Consumer Sentiment report might have a slight effect.  I will update you tomorrow with details.

Again, if you haven't locked already, my opinion is to lock for any loans that you are expecting to close within a 60 day period.  This is based on the risk vs reward factor whereas there is a higher risk than reward possibility for floating your loans.

Posted by

Andy Scherer

Loan Officer & Marketing Director

Approved Mortgage Group

610 Farm Lane, Doylestown, PA 18901

Mobile: 203-257-5279



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