Rate Lock Advisory

Friday's bond market has opened in positive territory following the release of this week's most important economic data. The stock markets are nearly unchanged with both the Dow and Nasdaq down only 1 point. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

The Commerce Department reported this morning that sales at retail establishments rose 0.7% last month. This was lower than revised forecasts of a 1.0% increase, indicating that consumer spending was not as strong as thought. This is great news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy.

The second piece of data released today was December's Producer Price Index (PPI). The Labor Department said that the overall PPI more than doubled forecasts, rising 0.9%. However, the good news came in the more important core data that showed a 0.1% increase, falling short of the 0.2% that was expected. This eased inflation concerns since the increase in the overall reading is being attributed to fuel prices that can be volatile month to month.

This morning's news is good for the bond market and I believe opens the door for bonds to move higher and mortgage rates to drop. Accordingly, the lock/float recommendations are being adjusted.

Next week brings us the r! elease o f a couple of reports. The first comes Tuesday with the release of December's Industrial Production data. Later in the week the Consumer Price Index (CPI) will be posted along with the Fed Beige Book. Look for more details in Sunday's weekly preview.

The bond market will close early today ahead of the Martin Luther King Day holiday and will reopen Tuesday morning. Both the stock and bond markets will be closed Monday.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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