Mortgage Commentary

[Adam in CO]

Tuesday’s bond market has opened in negative territory following the release of this morning’s economic news. The stock markets are currently showing gains with the Dow up 24 points while the Nasdaq has gained 5 points. The bond market is currently down 8/32, but we likely will see little change in this morning’s mortgage rates due to strength in bonds late yesterday.

The Labor Department gave us this week’s first piece of data with the revised 3rd Quarter Productivity report. It showed an upward revision of 0.2%, but this was less than the expected 0.5% increase. The lower than expected reading indicates that workers were less productive during the quarter than thought. This is considered bad news for bonds and mortgage rates because high levels of productivity allow the economy to expand with low inflationary pressures.

The second report of the day was October’s Factory Orders, which showed a larger than expected decline. The 4.7% drop was the largest monthly decline since July 2000 and the third decline in the past four months. That means that the manufacturing sector continues to show signs of weakness. This is good news for bonds because manufacturing weakness should help ease inflation concerns.

There is no relevant economic news scheduled for release tomorrow or Thursday. Look for the stock markets to drive bond trading. The Labor Department will post weekly unemployment claims Thursday morning, but unless they show another upward spike I don’t expect them to have much of an influence on bond trading or 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... 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.