Thursday's bond market has opened in positive territory following early stock weakness and news of an unexpected decline in home sales. The stock markets are showing losses with the Dow down 38 points and the Nasdaq down 25 points. The bond market is currently up 9/32, which will likely improve this morning's mortgage rates by approximately .125 - .250 of a discount point compared to yesterday's morning rates.

The Labor Department announced this morning that 530,000 new claims for unemployment benefits were filed last week. This was much lower than the 550,000 that was expected, meaning the employment sector was stronger than thought last week. That is bad news for bonds and mortgage rates, but since this data tracks only a week's worth of new claims, its impact on rate has been minimal.

The National Association of Realtors gave us today's second piece of data with the release of August's Existing Home Sales report. They said that resales of ex isting homes fell 2.7% last month when analysts were expecting them to report an increase. This was the first decline in five months, raising concerns that the housing sector may not be recovering as quickly as some had hoped. This is good news for bonds and mortgage rates because a broader economic recovery would be difficult with the housing sector still softening.

Today is the 7-year Treasury Note sale. If it is met with a similarly weak demand as yesterday's 5-year Note sale was, we could see mortgage rates move higher during afternoon trading. However, a strong demand from investors could lead to afternoon improvements to mortgage rates. This sale can be considered more important for mortgage rates than yesterday's 5-year auction was, meaning we may see a bigger reaction to its results than we did yesterday.

Tomorrow morning brings us the release of three economic reports, including the week's most important one. That is August's Durable Goods Orders, which will be posted early morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for an increase in orders of 0.5%. A smaller than expected increase could help bond prices and cause mortgage rates to drop tomorrow. However, a larger than expected rise would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

The second report is the University of Michigan's Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 70.2 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly higher than previously thought. A lower than expected reading would be good news for bonds and help improve mortgage rates tomorrow.

The final report of the week is A ugust's New Home Sales. It is expected to show that sales of newly constructed homes rose slightly in August. As with most of this week's data, this report will likely not have a significant impact on mortgage rates unless its readings differ greatly from forecasts.

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.

WEDNESDAY AFTERNOON UPDATE:


This week's FOMC meeting has adjourned with no change to key short-term interest rates. The post meeting statement didn't give us any surprises. The Fed stated that economic activity has picked up but that the labor market is still a concern and could hamper the economic recovery. They also indicated that inflation remains subdued, which is good news for bonds.

Today's 5-year Treasury Note auction was met with a demand that can be considered on the weak side. This had initially pressured bonds until the FOMC statement was released. The reference to inflationary pressures helped ease the negative tone in the bond market that came as a result of the 1:00 PM posting of the auction data.

The stock markets initially reacted favorably to the FOMC statement with the Dow and Nasdaq both setting new highs of the day immediately after it was released. However, they have since given back those gains and are now well into negative territory, setting new lows of the day. This has helped make bonds more attractive and led to some funds being shifted into the bond market. The end result is that we may see a slight improvement to mortgage rates this afternoon, but many lenders may just wait until tomorrow morning's update to reflect that change.

Weekly unemployment figures and August's Existing Home Sales report are the only semi-relevant economic releases scheduled for tomorrow. The Labor Department will give us last week's unemployment numbers early tomorrow. They are expected to say that 550,000 new claims for benefits were filed last week. But unless we see a wide variance between that figure and the actual number, I don't believe that this report will affect mortgage rates.

The National Association of Realtors will post their Existing Home Sales figures for August late tomorrow morning. This data gives us an indication of housing sector strength by tracking home resales in the U.S. It is expected to show a moderate increase from July's sales, however, this data is not considered to be of high importance to the bond market and likely will not cause a significant change to rates unless it varies greatly from forecasts.

Also tomorrow is the 7-year Treasury Note sale. If it is met with a similar demand as today's sale was, we could see mortgage rates move higher during afternoon trading. This sale gives us a better measurement of investor appetite for longer-term securities such as mortgage related bonds than today's 5-year Note sale did. So, we may see a more profound reaction in the bond and mortgage markets if the sale goes exceptionally well or badly.

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.

Wednesday's bond market opened slightly in negative territory as traders prepare for today's Treasury auction and the FOMC post-meeting statement. The stock markets are showing small losses with the Dow down 19 points and the Nasdaq down 2 points. The bond market is down 2/32, which will likely push this morning's mortgage rates higher by .125 - .250 of a discount point.

I am expecting to see a relative calm morning in trading and mortgage rates but would not be surprised at all to see a revision to mortgage pricing later today. This morning's weakness in bonds is common ahead of important Treasury auctions. If the sales go well, we usually see those losses recovered during afternoon trading.

The Treasury is selling 5-year Notes today and will post results at 1:00 PM ET. This sale does not directly affect mortgage rates, but it does help set the tone for bonds in general. If the sale is met with a strong demand, the broader bond market will l ikely move higher this afternoon. That includes mortgage-related bonds and should lead to downward revisions to mortgage rates later today. But if there was a weak interest in the sale, bonds may tumble after the results are posted, causing upward changes to rates.

Also today is the adjournment of the FOMC meeting that started yesterday. The 2:15 PM ET announcement will very likely say there was no change to key short-term interest rates. This is what the markets are widely expecting, so it should have little impact on trading or mortgage rates. However, the post-meeting statement could very well lead to volatility this afternoon as investors dissect it in an effort to find when the Fed's next move may come. Any indication of a potential rate increase in the near future could be disastrous for mortgage pricing because that would mean the Fed is concerned about inflation rising.

There will be an update to this report shortly after the markets have a n opportunity to react to the FOMC results. That update will also address tomorrow's data.

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.

Tuesday's bond market has opened up slightly despite no relevant economic news on tap today. The stock markets showing minor gains with the Dow up 27 points and the Nasdaq up 6 points. The bond market is currently up 4/32, but we will again likely see little change in this morning's mortgage rates as traders and lenders wait for tomorrow's events to take place before making any sizable changes.

There are no significant events or relevant economic reports scheduled for today. Investors seem to be preparing for tomorrow's events and will likely keep bond prices near current levels until then. This means I am not expecting to see any noticeable changes to mortgage rates this afternoon.

The first of this week's two important Treasury sales will take place tomorrow and the Fed's two-day FOMC meeting will adjourn tomorrow afternoon. The Treasury will sell 5-year Notes tomorrow and 7-year Notes Thursday. If investor demand in these sales is strong, pa rticularly from international buyers, the broader bond market should move higher pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of each sale will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading tomorrow and Thursday.

The FOMC meeting began today and will adjourn at 2:15 PM tomorrow afternoon. There is little possibility of seeing any type of change to key short-term interest rates. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find when the Fed's next move may come. The wild card is how the markets react to the statement because the lack of a change to monetary policy will not affect the markets. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mo rtgage rates during afternoon hours and Thursday morning.

We will finally get to see some economic data later this week. Thursday brings us the release of one relevant monthly report and Friday as three scheduled. None of the reports are considered to be extremely important to the markets, but we may see some movement in rates as a result of it, particularly Friday.

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.