Rate Lock Advisory - Monday Jan. 12th

Monday's bond market opened in negative territory but has since rebounded into positive ground. The stock markets are showing losses with the Dow down 85 points and the Nasdaq down 26 points. The bond market is currently up 10/32, but we will likely still see a small increase in this morning's mortgage pricing due to weakness in mortgage bonds late Friday and early this morning.

There is no relevant economic news scheduled for release today or tomorrow. Look for the stock markets to influence bond trading and therefore mortgage rates until we get to the relevant data later in the week. If we continue to see stock weakness, bonds may thrive, pushing mortgage rates slightly lower.

The rest of the week brings us the release of five pieces of economic data to digest. The first is December's Retail Sales data early Wednesday morning. This Commerce Department report measures consumer spending by tracking sales at retail establishments in the U.S. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. Current forecasts are calling for a decline in sales of approximately 1.1%. A larger drop would be good news for bonds and mortgage rates.

Overall, Wednesday, Thursday or Friday may end up being the most important day of the week. The single most important report is the CPI, but the Retail Sales and PPI reports on Wednesday and Thursday respectively, are also considered to be of high importance and can heavily influence the markets. Therefore, I strongly recommend maintaining contact with your mortgage professional, especially the latter part of the week.

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... Th is 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.