April 24th, 2020 1:11 PM by T. Fanning
Last Updated: 4/24/20Friday's bond market has opened in negative territory following some disappointing economic data. Stocks are mixed but fairly calm with the Dow up 24 points and the Nasdaq down 10 points. The bond market is currently down 4/32 (0.61%), which should keep this morning's mortgage rates close to Thursday's early pricing.March's Durable Goods Orders was the first of this morning's two economic releases. It revealed a decline of 14.4% in new orders for big-ticket products such as airplanes, appliances and electronics. This was a larger decline than many analysts had expected and is a reflection of the impact the coronavirus is having on the economy. However, a secondary reading within the report that tracks new orders excluding more volatile and costly transportation products fell a surprising 0.2% when it was expected to fall 4.0%. That forces us to consider the data neutral for mortgage rates instead of clearly favorable.The University of Michigan's revised Index of Consumer Sentiment for April was also released this morning, coming in at 71.8. This was an increase from the previous estimate two weeks ago and above forecasts of 67.0. The increase means that surveyed consumers felt better about their own financial situations than analysts had thought and therefore, are likely to spend more than the models predicted. That makes the data negative for bonds and mortgage rates because higher levels of consumer spending translate into stronger economic growth.Next week has plenty scheduled that has the potential to affect mortgage rates. There are a large number of economic reports set for release, including two extremely important ones. One of those two is the initial reading of the 1st Quarter Gross Domestic Product (GDP) that is considered to be the benchmark reading of economic growth or contraction. In additional to the data, there are also a couple of moderately important Treasury auctions as the new week starts and another FOMC meeting mid-week. Monday does not have any economic releases scheduled that we need to watch but does have the 5-year Treasury Note auction that will be an afternoon event. 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...Float 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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