Mortgage Market Update
Monday’s bond market has opened in negative territory despite favorable housing news. Although, bonds have improved from their pre-release levels. The stock markets are starting the week relatively calm with the Dow down 28 points and the Nasdaq down 1 point. The bond market is currently down 10/32 (1.90%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point is comparing to Friday’s early pricing. The National Association of Realtors gave us February's Existing Home Sales data late this morning. It showed a surprising 7.1% drop in home resales last month, falling well short of expectations. The larger than predicted decline in sales indicates weakness in the housing sector. Because a weakening housing sector makes broader economic growth less likely, we can consider this data good news for the bond and mortgage markets. Tomorrow has nothing of importance scheduled that is likely to influence mortgage rates. The rest of the week brings us only three more pieces of relevant economic data for the markets to digest. Most of the reports can have an impact on mortgage rates if they show surprises, but none of them are considered extremely important or key data. Overall, I suspect we will see some movement in mortgage rates this week, but I am not expecting an overly volatile several days. The bond market is expected to close early Thursday ahead of the Good Friday holiday. The stock and bond markets will be closed all day Friday and will reopen for regular trading Monday. It is common to see some pressure in bonds as investors make moves to protect themselves over the long holiday, so don’t be surprised if bonds weaken slightly early Thursday afternoon before closing.