Friday’s bond market has opened flat due to early stock gains and a lack of important economic data to offset them. The major stock indexes appear to be closing the week with an upward move. The Dow is currently up 61 points while the Nasdaq is up 8 points. The bond market is currently nearly unchanged from yesterday’s close at 2.61%, which should keep this morning’s mortgage rates at yesterday’s levels.
August’s Leading Economic Indicators (LEI) was posted at 10:00 AM ET this morning. The Conference Board said their LEI rose 0.2% last month, meaning they are predicting minor economic growth over the next several months. This was weaker than the 0.4% that was predicted, so we can consider the data good news for bonds and mortgage rates. Unfortunately, this report is not considered to be important to the markets. Therefore, we are not seeing much of a reaction to the news.
With the benchmark 10-year Treasury yield at 2.61%, I would not be surprised to see a slow small downward move as the recent volatility stabilizes. Since mortgage rates tend to follow bond yields, it could be good news for mortgage shoppers. I don’t necessarily believe that rates are due for a sizable downward move, just that the likelihood of them going much higher in the immediate future as subsided. Accordingly, I am taking a slightly less cautious approach towards locking a rate for longer-term periods. However, that can change at any time so please keep an eye on the markets if still floating an interest rate.
Next week doesn’t bring any key economic reports but we do have relevant data being posted four of the five days. In addition to the handful of reports, there are also a couple of Treasury auctions that have the potential to influence to rates. Monday does have one of those reports with the release of August’s Existing Home Sales data that will give us a measurement of housing sector strength. Look for details on all of next week’s activities 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.
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