Mortgage Commentary

[Adam in CO]

Wednesday?s bond market opened down but has since moved into slightly positive territory after this morning?s only news showed weaker than expected results. The stock markets are mixed with the Dow up 9 points and the Nasdaq down 1 point. The bond market is currently up 3/32, which with yesterday?s late strength will likely improve this morning?s mortgage rates by approximately .125 of a discount point.

The National Association of Realtors announced this morning that home resales fell to a four and a half year low last month. The 3.8% drop in sales was much larger than what was expected, indicating that the housing sector is still slowing rapidly. This was the first of two housing sector related reports scheduled for release this week. June?s New Home Sales will be posted tomorrow morning, but since it tracks only the 15% of the home sales that today?s report doesn?t cover, it likely will have less of an impact on rates than today?s data did.

The Fed will release its Beige Book report this afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. With Fed Chairman Ben Bernanke?s testimony last week, I don?t think we will see any significant surprises in this report, and therefore will likely not cause much movement in mortgage rates this afternoon.

Tomorrow morning?s important economic data will come from the Commerce Department when they will post June?s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a gain of 2.0% after showing a sizable loss in new orders during May. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates tomorrow morning. If it reveals a smaller than expected rise or a decline, mortgage rates should drop tomorrow.

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.