Friday's bond market opened flat but is currently up 22 basis points following favorable consumer confidence news and another infusion of Fed Capital. The stock markets closed the week up with the Dow up 73 points and the Nasdaq up 19 points. Rates came out at 11:00 AM in line with yesterday's close, but becasue of improving markets we have re-posted twice with a total reduction in discount points of .25%.

Important Note: As we've said before, mortgage interest rates are low NOT because the Fed lending rate is low. Though the same market force may effect both there is no direct correlation. Rates are low because the Federal Reserve has propped up the Fannie Mae bond market by purchasing over a trillion dollars in mortgage backed securities (MBS). But note, in October the Fed was purchasing about $17B a week and in November that dropped to $14B a week...and what happened? Rates went up. The Fed MBS purchase program is slatted to end in March 2010 capping at $1.25 trillion. So there are good and bad bond days depending on economic news, bond investment interest and stocks. But the trend is that rates are going up.  We've hit a low this week, but its not as low as in early October. I say all of this because I know there are a lot of folks sitting on the fence, many who missed their chance earlier to refinance. Rates are in a great spot and I don't want to see anyone miss the opportunity again. My advice is that you take advantage of this low point for rates.

September's Goods and Services Trade Balance report was posted this morning, giving us the size of the U.S. trade deficit. It revealed a deficit of $36.5 billion that exceeded forecasts by a wide margin. Fortunately for mortgage rates this data is not considered to be highly important to the markets.

The second report of the day was the University of Michigan's Index of Consumer Sentiment for November. It came in with a reading of 66.0, falling well short of analysts' expectations. This was good news for bonds because it indicated that consumers were much less optimistic about their own financial situations than many had thought. That means they are less likely to make large purchases in the near future, limiting fuel for economic growth.

Yesterday's 30-year Treasury Bond auction drew a lackluster interest from investors. Many of the readings used to measure investor demand fell short of recent sales. This means that investors are leery of purchasing long-term debt from the U.S., but mortgage-related bonds faired well despite the news. This led to many lenders revising rates lower late yesterday or this morning.

Next week is much more active in terms of economic releases than this week was. We do have important data being posted Monday morning when the Commerce Department will release October's Retail Sales data. This is a very important release because it gives us a measurement of consumer spending. Since consumer level spending makes up two-thirds of the U.S. economy, any related news is watched closely.

The rest of the week gives us additional important reports such as the two key inflation indexes. Look for more details on those and the rest of next week's events in Sunday's weekly preview.

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... Float 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.