Market Update

Updated on March 23, 2018 10:33:47 AM EDT
Friday’s bond market has opened in negative territory, giving back some of yesterday’s rally. Stocks are mixed with the Dow up 105 points and the Nasdaq down 11 points. The bond market is currently down 4/32 (2.83), which should push this morning’s mortgage rates higher by slightly less than .125 of a discount point.

February's Durable Goods Orders showed a larger than expected increase of 3.1%. Analysts were expecting to see an increase of 1.5%, making the data bad news for bonds and mortgage rates. Even a secondary reading that excludes more volatile and costly orders for airplanes and related products came in much stronger than expected. Because it shows a stronger manufacturing sector, this news has had a negative impact on today’s mortgage pricing.

Also posted this morning was February's New Home Sales figures. The Commerce Department gave us a bit of favorable news by announcing a 0.6% decline in sales of newly constructed homes. Forecasts were calling for an increase in sales, meaning the new home portion of the housing sector was weaker than thought. However, new home sales make up only a small portion of all home sales, so its influence in the markets is not high. That has prevented us from seeing a positive reaction in the bond and mortgage markets this morning.

Next week is much lighter than this week in terms of data and other scheduled events that are expected to affect mortgage rates. There are only a few moderately important releases scheduled along with two potentially relevant Treasury auctions. Now that the FOMC meeting has passed, we will start to see Fed speaking engagements that may come into play also. Look for details on next week’s calendar in Sunday evening’s weekly preview.

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... 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.

 ©Mortgage Commentary 2018
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