Wednesday, July 22th
Wednesday’s bond market has opened with losses yet again as the negative momentum continues another day. Stocks are mixed with the Dow up 177 points and the Nasdaq down 114 points. The bond market is currently down 7/32 (4.65%), which should cause an increase in this morning’s mortgage rates of approximately .125 of a discount point if compared to Tuesday’s early pricing.
7/32
Bonds
30 yr - 4.65%
177
Dow
52,401
114
NASDAQ
25,725
Trailing 90 Days - National Average
Medium
Negative
There is no relevant economic data being released today that has the potential to affect mortgage rates. The upward move in yields and mortgage rates comes as no surprise after the ceasefire with Iran crumbled earlier this month. The escalating military action and the near closure of the Strait of Hormuz again has oil and gas prices higher and other shipping at a standstill. This has reignited inflation concerns that make bonds less appealing to investors, leading to yields and mortgage rates moving higher.
Medium
Unknown
We do have a 20-year Treasury Bond auction happening today that we will be watching because it will give us an indication of investor appetite for long-term debt and rates are based on long-term securities. If the 1:00 PM ET results announcement points to a strong demand from investors, particularly international buyers, we may see afternoon strength in bonds. This could translate into a slight improvement in rates before the end of the day. However, a lackluster interest in the securities could lead to an upward revision in mortgage pricing.
Medium
Unknown
Tomorrow’s only economic release is the weekly unemployment update that is expected to show 213,000 new claims for jobless benefits were filed last week. This would be an increase from the previous week’s 208,000 initial filings, signaling the employment sector weakened a bit last week. Since bonds tend to thrive during weaker economic conditions, good news would be a higher than expected number. While this is just a weekly snapshot that usually carries much less significance than the monthly reports, the fact there is so little on this week’s calendar could draw a stronger response to a surprise than we would normally see.
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.