If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 and 60 days… 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.
Friday’s bond market opened up sharply following weaker than expected inflation readings, but has since given back some of those gains. The stock markets are showing sizable losses with the Dow down 150 points and the Nasdaq down 35 points.
The bond market is currently up 20/32, which should improve this morning’s mortgage rates by approximately .250 - .375 of a discount point. However, if bonds give back more of their earlier gains, we may see upward revisions to mortgage rates later today.
The Labor Department gave us the big news for the day with the release of February’s Consumer Price Index (CPI). It showed no change in the overall index and the same in the core data reading. Both of these readings were well below analysts’ forecasts of 0.3% and 0.2% increases respectively.
This means that inflationary pressures at the consumer level of the economy were not as strong as thought. That is very good news for bonds and mortgage rates because inflation er odes the value of a bond’s future fixed interest payments and leads to selling in mortgage related securities.
The University of Michigan’s Index of Consumer Sentiment was also posted this morning. It showed a reading of 70.5, which was a little stronger than expected. Fortunately though, the CPI far outweighs this index in importance and had a much bigger influence eon trading this morning.
Next week is fairly busy with economic releases, beginning with Monday’s Industrial Production report. We also will get to see inflation readings at the producer level of the economy in the Producer Price Index (PPI) Tuesday. But the big news will be the FOMC meeting Tuesday.
Look for more details on next week’s data and event sin Sunday’s weekly preview.