Today's Commentary

Updated on October 23, 2014 11:11:43 AM EDT

Thursday’s bond market has opened in negative territory with stocks rallying and no major economic data to offset that stock influence. The major stock indexes are reacting positively to some corporate earnings news, pushing the Dow higher by 230 points and the Nasdaq higher by 64 points. The bond market is currently down 13/32 (2.26%), which should push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point.

Today’s two economic reports gave us mixed results but hasn’t had much of an impact on this morning’s pricing. The first report came at 8:30 AM ET when last week’s unemployment figures were posted. It showed that 283,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised total of 266,000 initial claims. The increase in claims indicates the employment sector weakened some last week, but the fact that it fell just short of expectations makes the news neutral to slightly positive for the bond and mortgage markets.

September's Leading Economic Indicators (LEI) was also posted this morning. The Conference Board announced at 10:00 AM ET that September’s LEI rose 0.8%, exceeding forecasts of a 0.5% increase. That is negative news for bonds and mortgage rates because it is predicting stronger than expected economic growth over the next several months.

Tomorrow closes the week with September's New Home Sales report at 10:00 AM ET. This data covers the small percentage of home sales that Tuesday's Existing Home Sales report didn't include. It is expected to show a decline in sales of newly constructed homes, but regardless of its results I am not expecting it to have a significant impact on tomorrow’s mortgage rates.

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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