Rate Lock Update

Thursday’s bond market has opened in positive territory despite early stock gains and mixed economic news. The stock markets are in positive territory still with the Dow up 13 points and the Nasdaq up 7 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

July’s Goods and Services Trade Balance was this morning’s only monthly economic news released. It showed the trade deficit stood at $32.0 billion in July, which was much higher than expected. However, this news is not usually very influential towards mortgage rates, so its impact has been minimal.

The Labor Department gave us last week’s unemployment figures, announcing that 550,000 new claims for benefits were filed last week. This was lower than expected and can be considered negative towards bonds and mortgage rates. But this data also is not considered to be highly important to mortgage rates because it tracks only a week’s worth of claim.

Yesterday’s Beige Book didn’t reveal any significant surprises, but it did indicate that economic activity increased in most regions of the U.S. The labor market has not shown significant signs of improvement, so there is still a cautious optimism towards an economic recovery in the near future.

Yesterday’s 10-year Treasury Note sale went fairly well, leading to hope that today’s 30-year auction will be met with a strong demand. If there is indeed strong investor interest in today’s sale, we may see bond prices rise further and mortgage rates possibly revise lower this afternoon.

Tomorrow’s only relevant data will come from the University of Michigan. Their Index of Consumer Sentiment will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 67.8 that would mean confidence rose from August’s final reading. That would be considered bad news for bonds and mortgage rates.

If I were considering financing/refinancing a home, I would…. Float 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.

About Two Bald Mortgage Guys

Ken Blanchard, one of the country’s premier business leadership authors, says in his latest book, “To keep customers today, you can’t be content to merely satisfy them; you have to give them legendary service and create ‘raving fans’ – customers who are so excited about the way you treat them that they tell stories about you.” In everything we do, this is what we envision. We see people such as yourself being so enthused with the process and service we provide that you will become a raving fan for us, telling stories to people of what you just experienced.


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