Friday, April 20th
Friday’s bond market has opened in negative territory again as the selling continues into another day. The major stock indexes are showing losses of 54 points in the Dow and 35 points in the Nasdaq. The bond market is currently down 6/32 (2.93%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point if comparing to Thursday’s early pricing.
6/32
Bonds
30 yr - 2.93%
54
Dow
24,610
35
NASDAQ
7,202
Trailing 90 Days - National Average
High
Negative
There is nothing if importance set for release today. That may be bad news for bonds and mortgage rates because some friendly economic data would be quite helpful. The benchmark 10-year Treasury Note yield is now above what looks to be a critical resistance level. What is concerning is that if we stay above 2.91%, there isn’t much to prevent a move to 3.00% or even higher. I suspect 3.00% won’t be easy to crack, but since mortgage rates tend to track bond yields, just testing that threshold means rates would be higher than where they are this morning.
Medium
Unknown
What is worth noting and could work in our favor is the fact that the last time yields were in this area, concerns about their impact on corporate borrowing and economic growth caused a huge sell-off in stocks. That in turn led to funds moving into bonds, driving yields and mortgage rates lower. One could argue that we are ripe for a sequel to that story, although stocks are not as high now as they were when that last happened. However, until we actually see the sell-off in stocks start or yields retreat below 2.91% on their own, there is a fairly high risk of rates moving higher in the immediate future.
Medium
Unknown
Next week has a handful of relevant economic reports that are expected to influence mortgage rates, some of which are considered to be highly important. The most important data comes later in the week, but there is something taking place each day- starting with Existing Home Sales Monday morning. There are also a couple of Treasury auctions mid-week to watch. Look for details on all of next week’s activities in Sunday evening’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... 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.