Mortgage Commentary
#1
05-15-2007, 02:31 PM
Mortgage Commentary
Tuesday’s bond market has opened up slightly after this morning’s inflation news didn’t give us any significant surprises. The stock markets are showing strong gains with the Dow up 93 points and the Nasdaq up 7 points. The bond market is currently up 3/32, but due to weakness in bonds late yesterday we will likely see a slight increase in this morning’s mortgage pricing.
The Labor Department reported this morning that the CPI rose 0.4% last month, falling just short of expectations. The more important core data rose 0.2%, matching forecasts. The weaker than expected overall reading can be considered good news, but the core data is the major focus of the report. Therefore, its results haven’t fueled much buying or selling in bonds.
There are two pieces of data due to be posted tomorrow. April’s Housing Starts is the first. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a decline in new starts from March’s readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.
The second piece of data due Wednesday is April’s Industrial Production. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities and is considered to be moderately important. It is expected to show a 0.3% increase in production, indicating that manufacturing activity is growing moderately. A smaller increase in output would be good news for the bond market and mortgage rates.
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 Labor Department reported this morning that the CPI rose 0.4% last month, falling just short of expectations. The more important core data rose 0.2%, matching forecasts. The weaker than expected overall reading can be considered good news, but the core data is the major focus of the report. Therefore, its results haven’t fueled much buying or selling in bonds.
There are two pieces of data due to be posted tomorrow. April’s Housing Starts is the first. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a decline in new starts from March’s readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.
The second piece of data due Wednesday is April’s Industrial Production. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities and is considered to be moderately important. It is expected to show a 0.3% increase in production, indicating that manufacturing activity is growing moderately. A smaller increase in output would be good news for the bond market and mortgage rates.
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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