August 21st, 2020 11:09 AM by T. Fanning
Last Updated: 8/21/20Friday's bond market has opened fairly flat following stronger than predicted economic news. Stocks are showing early gains of 91 points in the Dow and 2 points in the Nasdaq. The bond market is currently down 1/32 (0.65%). That, along with yesterday's slight weakness, should lead to an increase in this morning's mortgage rates of approximately .125 of a discount point over Thursday's early pricing.The National Association of Realtors announced late this morning that home resales jumped 24.7% last month, exceeding expectations of a 14% rise. This report gives us an indication of housing sector strength and mortgage credit demand. Fortunately, it is considered to be only moderately important to the bond and mortgage markets, preventing a more noticeable reaction to the data. Still, we should label this report as unfavorable for rates as it shows the housing sector was stronger than thought. That is a sign of economic strength that makes long-term securities, such as mortgage bonds, less attractive to investors.Next week has much more scheduled that may affect mortgage rates than this week did. In addition to the large batch of economic data there also are a couple of Treasury auctions that we will be watching. Furthermore, the annual Fed Jackson Hole conference is taking place late next week. This is where the world's central bankers meet to discuss the global economy and share ideas to control it. The conference has plenty of speeches by key central bank members that often heavily influence the markets.Monday has nothing of importance scheduled, meaning we can expect weekend news and stock movement to drive bond trading and mortgage rates as the new week begins. 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 were taking place within 7 days...Float if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
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