August 16th, 2019 1:57 PM by T. Fanning
Last Updated: 8/16/19Friday's bond market has opened in negative territory, erasing most of yesterday's late gains. Stocks are in positive ground, pushing the Dow up 145 points and the Nasdaq up 79 points. The bond market is currently down 14/32 (1.54%), but strength yesterday afternoon should still allow this morning's rates to be slightly lower than Thursday's early pricing. Many lenders improved pricing intraday yesterday as bonds extended their morning gains. If you saw an intraday revision you will likely see an increase this morning.July's Housing Starts report was posted at 8:30 AM ET this morning, revealing a 4.0% drop in new home groundbreakings. This was weaker than expected, hinting at a softer housing sector. However, the decline is being attributed to lower multi-family housing starts. New groundbreakings for single family homes actually rose last month and a secondary reading that tracks new permits issued for future starts was stronger than forecasts. That makes the data neutral to slightly negative for bonds and mortgage rates.We did get some good news from this morning's second release. The University of Michigan's preliminary Index of Consumer Sentiment for August came in at 92.1, well below July's 98.4 and forecasts of 97.7. The lower reading indicates surveyed consumers did not feel as strong about their own financial situations as many had thought. Because waning confidence in their finances usually means consumers will delay making a large purchase in the near future, we can consider this good news for rates. That is because consumer spending makes up almost 70% of our economy and bonds tend to thrive during weaker economic conditions. Unfortunately, this report is not important enough to offset the negative momentum in bonds this morning.Next week lacks any key economic data with just a couple of housing reports and one other release scheduled. But we do get the minutes from last month's FOMC meeting where the Fed cut key rates for the first time since December 2008. They have the potential to create volatility in the markets or be a non-factor. The same can be said for a speaking engagement by Fed Chairman Powell next Friday morning. The week starts off with nothing of relevance scheduled, leaving weekend news and stock movement to drive bond trading and mortgage rates. Look for details on all of next week's activities in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
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