Monday’s Bond Market

Monday’s bond market has opened in positive territory following early stock losses. The Dow is currently down 18 points while the Nasdaq has fallen 15 points. The bond market is currently up 5/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

This week brings us the release of several very important pie ces of economic news. There are a total of eights reports due to be posted this week, with all but a two of them considered to be of high importance to the bond market and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

The first report comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to continue to spend.

However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would ease inflation concerns. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 106, which would be a decline from March’s 107.2 reading.

Also late tomorrow morning, the National Association of Realtors will post March’s Existing Homes Sales numbers, which are expected to show a drop from February. A similar report to this one- March’s New Home Sales will be released Wednesday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts’ forecasts, I don’t think they will cause much movement in mortgage rates.

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Friday is the most important day of the week with the GDP and ECI reports due to be posted, but we may see significant changes to rates tomorrow or Wednesday also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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.