Friday, September 20th
Friday’s bond market has opened in negative territory despite little to drive trading this morning. Stocks are also showing losses with the Dow down 50 points and the Nasdaq down 61 points. The bond market is currently down 12/32 (3.75%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point.
12/32
Bonds
30 yr - 3.75%
50
Dow
41,974
61
NASDAQ
17,952
Trailing 90 Days - National Average
Medium
Negative
We don’t have any relevant economic data being released today. We are likely seeing traders digest this week’s events and data that raises optimism the U.S. economy will continue to grow. The Fed’s .500 rate cut has altered theories about the direction of the economy in the coming months. They lower key rates to boost economic activity to avoid slipping into a recession. This week’s news changed the opinion of some analysts that were predicting the economy would weaken, now predicting little chance of a recession. Since bonds tend to thrive in weaker economic conditions, we are seeing negative movement as a result.
High
Unknown
Next week has plenty of economic data and other events scheduled that may influence mortgage rates. It starts light with nothing of importance set for Monday but gets more active as the week progresses. The more important releases come late in the week, such as August’s Durable Goods Orders and Personal Income and Outlays that includes the Fed’s preferred inflation gauges. In addition to those and a few moderately important reports, there are also a couple of short-term Treasury auctions that may come into play during afternoon trading midweek.
Medium
Unknown
Now that the FOMC meeting is behind us, so is the Fed’s required quiet period where members cannot speak publicly about the economy or monetary policy. Those Fed-member speeches get into full swing next week with a good number of them scheduled, including one by Chairman Powell Thursday morning. They are spread throughout the week, meaning they may affect bond trading and mortgage pricing multiple days. 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 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.