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. 

Friday's bond market has opened in positive territory following news of slower than expected economic activity during the last few months. The stock markets initially opened with losses, but have since recovered to currently show minor gains. The Dow is currently up 15 points while the Nasdaq has gained 4 points. The bond market is currently up 13/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.

This morning's big news was the release of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It revealed an annual rate of growth of 2.4% that was slightly lower than forecasts. Making this even better news was a large upward revision to the 1st Quarter's final reading, meaning economic activity slowed considerably between the first and second quarters of the year. The slowing economy creates a favorable environment for the bond market and makes longer-term securities such as mortgage-related bonds more attractive to investors. As investors move funds into bonds, their yields drop and mortgage rates improve.

The 2nd Quarter Employment Cost Index (ECI) was also released this morning, showing a 0.5% increase. This matched forecasts, indicating that employer costs for wages and benefits rose during the quarter. That can basically be considered bad news for bonds as it raises the possibility of wage inflation and gives consumers more fuel to spend, but since it pegged expectations its impact on this morning's rates has been minimal.

Lastly, the University of Michigan revised their Index of Consumer Sentiment for July with a reading of 67.8. This means that consumer sentiment was stronger than previously estimated, which can be considered negative for bonds. However, it was not enough of a variance to influence bond trading or mortgage rates, especially since the GDP reading carries significant importance to the markets.

Next week is fairly busy with a handful of relevant economic reports scheduled for release, but it is not the number of reports that makes it an active week. It is the importance of some of the data that draws attention, such as the Institute for Supply Management's (ISM) manufacturing index during late morning hours Monday. And the almighty monthly Employment report early Friday morning. In between there are also a couple of reports that may influence rates. Look for more details on next week's events in Sunday's weekly preview.

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