Mortgage Commentary
#1
02-05-2007, 03:07 PM
Mortgage Commentary
This week brings us little economic data of any importance. There actually is only one report scheduled for release that would fall under the moderately important or important categories. This leaves the bond market to be influenced by outside factors such as stock market movements.
The only monthly report being released of any importance is Wednesday’s Productivity and Costs data for the 4th Quarter. Since a high level of productivity is thought to allow economic growth without inflationary concerns, this data can cause enough movement in the bond market to affect mortgage rates. If it varies greatly from analysts’ forecasts of a 1.7% increase, we may see some movement in mortgage rates Wednesday.
Besides Thursday’s weekly unemployment claims, the only other information that may lead to changes in mortgage rates are a few Treasury auctions scheduled for this week. Included in this week’s sales are 10 year Notes on Wednesday and the 30 year Bonds Thursday. It is typical to see a little weakness in bonds ahead of these sales as investors prepare for them. If the auctions are met with a strong demand from investors, particularly international traders, we should see bonds move higher during afternoon trading of the sale days. This should lead to afternoon improvement in mortgage rates.
Overall, I expect to see a fairly quiet week in the mortgage market. The economic data is of no significant importance and the Treasury auctions usually have no major impact on rates. We may see a little movement from day to day, but I would be surprised if we saw either a sizable rally or sell off in the bond market the next several days.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.
The only monthly report being released of any importance is Wednesday’s Productivity and Costs data for the 4th Quarter. Since a high level of productivity is thought to allow economic growth without inflationary concerns, this data can cause enough movement in the bond market to affect mortgage rates. If it varies greatly from analysts’ forecasts of a 1.7% increase, we may see some movement in mortgage rates Wednesday.
Besides Thursday’s weekly unemployment claims, the only other information that may lead to changes in mortgage rates are a few Treasury auctions scheduled for this week. Included in this week’s sales are 10 year Notes on Wednesday and the 30 year Bonds Thursday. It is typical to see a little weakness in bonds ahead of these sales as investors prepare for them. If the auctions are met with a strong demand from investors, particularly international traders, we should see bonds move higher during afternoon trading of the sale days. This should lead to afternoon improvement in mortgage rates.
Overall, I expect to see a fairly quiet week in the mortgage market. The economic data is of no significant importance and the Treasury auctions usually have no major impact on rates. We may see a little movement from day to day, but I would be surprised if we saw either a sizable rally or sell off in the bond market the next several days.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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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