Tuesday’s bond market has opened up slightly despite much stronger than expected economic news. Stocks are mixed with the Dow up 16 points and the Nasdaq down 5 points. The bond market is currently up 2/32 (2.37%), which should keep this morning’s mortgage rates very close to yesterday’s morning levels.
March’s Consumer Confidence Index (CCI) was today’s only relevant economic data, coming at 10:00 AM ET. The Conference Board announced a reading of 125.6 that greatly exceeded expectations of 113.3. It was an increase from February’s revised 116.1 and was the highest reading since December 2000. That indicates consumers were much more confident in their own financial situations than many had expected. Since rising confidence usually translates into stronger levels of consumer spending, this is clearly bad news for bonds and mortgage pricing. Fortunately, the markets don’t seem to be paying too much attention this morning, limiting the impact on today’s rates.
We also have the first of this week’s two relatively important Treasury auctions taking place today. 5-year Treasury Notes will be sold today while 7-year Notes go tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong investor demand usually makes bonds more attractive to investors and brings more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.
Tomorrow has no relevant economic data being released. There is the 7-year Note auction and a couple of Fed speaking engagements that may affect bond trading and mortgage rates, but none are likely to cause significant volatility or noticeable movement in 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... 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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