Market Snapshot

On my Twitter page I am currently advising float, but only in the IMMEDIATE term...that means today. This drop will likely be short-lived so I recommend poising yourself to take advantage. Apply online if you have not because only pre-approved loans can be locked.

Market News

November's Goods and Services Trade Balance report was posted this morning, showing a larger than expected $36.4 billion trade deficit. Analysts were expecting to see a $34.5 billion deficit, but this data is the week's least important and does not carry the influence to heavily affect mortgage pricing. Therefore, its impact on today's rates has been minimal.

There is no relevant data scheduled for release tomorrow morning. However, the Federal Reserve will post its Fed Beige Book report at 2:00 PM ET tomorrow. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.

The first of this week's two important Treasury auctions is tomorrow also. The Treasury will sell 10-year Notes and will post results at 1:00 PM ET. If there is a strong demand for the Notes, we should see the bond market move higher during afternoon trading. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.

This week also kicks off the quarterly earnings season. Alcoa, who is usually the first Dow component company to report each quarter, gave investors disappointing results after the close yesterday. This has led to concern about results from other big-name companies in the coming weeks. That has some investors shifting funds from stocks (expecting stock prices to fall further as more disappointing results are announced) into bonds as a safe-haven. This is good news for the bond market, at least temporarily and could lead to further improvements in mortgage rates if the pattern continues.

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.