Wednesday’s bond market has opened up slightly with little to drive trading today other than early stock weakness. Stocks are showing noticeable losses with the Dow down 115 points and the Nasdaq down 372 points. The bond market is currently up 2/32 (4.29%), but a little weakness again late yesterday should keep this morning’s mortgage rates nearly unchanged from Tuesday’s morning pricing. 2/32 Bonds 30 yr - 4.29% 115 Dow 44,806 372 NASDAQ 20,942
Indexes Affecting Rate Lock LowUnknownFed TalkToday’s only events that may influence rates will come during afternoon trading. There are two Fed-member speaking engagements, one at 11:00 AM ET and the other at 3:00 PM. However, neither are likely to create headlines that would affect bond trading or mortgage pricing. That doesn’t mean there is no possibility of seeing a reaction to something said, but if there is, it would be minor and probably not enough to cause an intraday revision to rates. MediumUnknownTreasury Auctions (5,7,10,20,30 year)The other two events are worthy of much more attention as they may in fact cause a slight change to mortgage rates. First comes the 1:00 PM ET results announcement of today’s 20-year Treasury Bond auction. Good news for rates would be the benchmarks showing a strong demand from investors, indicating a decent appetite for longer-term securities. This is relevant because mortgage rates are based on long-term bonds. On the other hand, a lackluster interest in the securities could lead to pressure in the broader bond market and may cause a slight upward revision to rates before the end of the day. MediumUnknownFOMC Meeting MinutesWe will also get the minutes from last month's FOMC meeting at 2:00 PM ET. This meeting adjourned less than two days before the surprisingly weak July Employment report was posted and approximately two weeks prior to the key inflation index that revealed wholesale inflation spiked last month. Each of those events could have altered the 10-2 vote to leave short-term rates unchanged. In other words, it is difficult to expect something substantive to come in the minutes since they are now almost irrelevant due to the data that was made available after the meeting. Still, if the markets react to the release, it will come during mid-afternoon hours today. MediumUnknownWeekly Unemployment Claims (every Thursday)Tomorrow has three pieces of moderately important economic data for the markets to digest. The day’s first release will be last week’s unemployment figures at 8:30 AM ET. They are expected to show 225,000 new claims for jobless benefits were made last week. This would be a slight increase from the previous week’s 224,000 initial filings. The larger the number, the better the news for mortgage rates because rising claims are a sign of weakness in the employment sector. MediumUnknownExisting Home Sales from National Assoc of RealtorsNext will be July's Existing Home Sales report from the National Association of Realtors at 10:00 AM ET. This report gives us detailed insight into the housing sector. It covers a high percentage of all home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts' forecasts. It is expected to show a small decline in June's sales, meaning the housing sector softened slightly last month. A weakening housing sector makes broader economic growth less likely. Accordingly, good news for rates would be a noticeable decline in sales. MediumUnknownLeading Economic Indicators (LEI) from the Conference BoardJuly's Leading Economic Indicators (LEI), also at 10:00 AM, will close this week’s economic calendar. This Conference Board index attempts to predict future economic activity, particularly during the next three to six months. Current forecasts are calling for a 0.1% decline from June's reading, meaning the indicators are pointing towards slightly weaker economic activity over the next several months. A larger decline would be favorable news for mortgage pricing.
Float / Lock Recommendation 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... Lock 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.
