Market Snapshot

Wednesday's bond market opened flat then proceeded to lose 12 basis points throughout the day.  The Dow closed down 19 and the Nasdaq up 9 points. Between yesterday and today's close, the moprtgage bond market has lost a total of 57 basis points. Thus discounts points have gone up 1/2%. Notice how the bond market loses 57 basis points and discount points go up 50 basis points.

Lock or Float?

Friday's jobs report may be seen with optimism by stock traders if it hits the 120K mark that is projected, but if the numbers are substantially higher, mortgage bonds could benefit.  Support is some 75 basis points below, so the bond has a ways to go before finding support. Bond volume is waning. The damage from Tuesday and today is done, so I would recommend taking a wait-and-see attitude on the jobs report.

Mortgage Market News

Today's only relevant report comes during afternoon trading. The Fed Beige Book will be released at 2:00 PM ET today. This report, which is simply named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises.

Tomorrow morning brings us the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for the bond market. It is the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 8.6%, down from the previous estimate of 9.5%.

We also get weekly unemployment figures from the Labor Department tomorrow morning. They are expected to say that 480,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week, but unless the total varies greatly from this forecast I don't believe it will have much of an impact on tomorrow's mortgage rates.

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.