Today's Commentary

Updated on October 22, 2014 11:22:19 AM EDT

Wednesday’s bond market has opened flat as stocks have done also. The Dow and Nasdaq are both up a couple points from yesterday’s close while the bond market is nearly unchanged also at 2.22%. This should keep this morning’s mortgage rates at yesterday’s levels.

This morning’s only economic data was September's Consumer Price Index (CPI) at 8:30 AM ET. It gave us mixed results but no big surprises. The overall reading rose 0.1% when it was expected to be unchanged and the core reading that excludes more volatile food and energy costs rose 0.1%, falling just short of the 0.2% forecast. The increase in the overall reading was a bit negative for bonds but the weaker core reading offsets that. Both readings indicate inflationary pressures at the consumer level of the economy remain subdued. That is generally good news for the bond market and mortgage rates. However, since both were close to expectations, we have seen little impact on this morning’s trading.

Tomorrow has two pieces of data but neither are considered to be highly important. The first will be last week’s unemployment figures at 8:30 AM ET. They are expected to show that 285,000 new claims for unemployment benefits were filed last week, up noticeably from the previous week’s 264,000 initial claims. The higher the number of new claims, the better the news it is for mortgage rates because rising claims hints at a softening employment sector. It is worth noting though that because this is only a weekly report, it usually takes a surprisingly weak or strong number for the data to affect mortgage rates.

September's Leading Economic Indicators (LEI) will be released by the Conference Board at 10:00 AM ET tomorrow morning. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.5% from August's reading. This would indicate that economic activity is likely to increase over the next couple of months. That would be relatively bad news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a decline though.

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... Lock 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 2014
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