Mortgage Commentary

[Adam in CO]

Wednesday?s bond market has opened slightly in positive territory despite a higher than expected GDP revision and early stock market gains. The Dow is currently up 70 points while the Nasdaq has gained 19 points. The bond market is currently up 3/32, but I am not expecting to see much of a change in this morning?s mortgage rates.

This morning?s revision to the 3rd Quarter Gross Domestic Product (GDP) showed that the economy grew at a 2.2% annual pace compared to the 1.6% rate that was previously announced. Analysts were expecting to see an upward revision, but only to 1.8%. The new reading indicates that the economy was much stronger in the quarter than many had thought. This is bad news for the bond market because stronger economic activity tends to raise inflation concerns.

Today?s second report was October?s New Home Sales that showed weaker than expected results. The Commerce Department said that sales of newly constructed homes fell 3.2% last month, exceeding forecasts of a 2.0% drop. Unfortunately though, this data is not considered to be of high importance to bonds or mortgage rates.

Later today, the Federal Reserve will release its? Beige Book report that details economic activity throughout the U.S. by region. Signs of moderate economic strength should not come as a surprise to the markets and probably will not have much of an impact on rates. It will be posted at 2:00 PM ET, so any market reaction will come during afternoon trading.

Tomorrow?s only important data is October?s Personal Income and Outlays data at 8:30 AM ET. This data is thought to measure consumers? ability to spend and their current spending habits. It is expected to show that income rose 0.5% but that spending rose only 0.1%. Smaller than expected readings would be good news for bonds and could lead to improvements in mortgage rates tomorrow morning.

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.