Monday’s bond market has opened down slightly with no relevant economic news to fuel interest in bonds. The stock markets are showing losses with the Dow down 22 points and the Nasdaq down 7 points. The bond market is currently down 3/32, which will likely push this morning’s mortgage rates higher by another .125 to .250 of a discount point.

This week br ings us only two reports that are likely to cause movement in mortgage rates. There are a total of three pieces of data scheduled for release during the week, but only one of them is important to enough to warrant concern or much attention. One is considered to be of moderate importance and the remaining is not likely to greatly affect rates unless it varies significantly from forecasts.

The first piece of data is the least important of the three. May’s Housing Starts report will be posted early tomorrow morning, giving us a measurement of housing sector strength. This data usually doesn’t have a major impact on the bond market or mortgage rates and I see no reason for this month’s results to be any different.

Thursday morning brings us the release of May’s Leading Economic Indicators (LEI). The Conference Board, who is a New York-based business research group, will post this data late morning. It attempts to predict economic activity over the next three to si x months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher tomorrow morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show a decline of 0.4%.

The sole important release is due to be released early Friday morning. The Commerce Department will announce May’s Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show an increase of 0.8% in May’s new orders. A larger than expected increase would likely push stock prices higher and mortgage rates lower. A smaller than expected increase would be an ideal scenario for the bond market and could lead to a decline in mortgage pricing Friday.

Overall, I am expecting a fairly quiet week in the bond and mortgage markets. We may see mortgage rates fluctuate slightly day to day, but I don’t think we will see any sig nificant moves until possibly Friday. The quietest days will likely be tomorrow and Wednesday with no data or major speeches to affect the markets. However, I am still holding the lock recommendation for most periods.

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.

a la mode

---