Wilshire Weekly Mortgage Rate Update March 4, 2008

Where we are at:

Monday’s bond market opened in negative territory despite weaker than expected economic news and a lack of stock selling. The stock markets are flat with the Dow and Nasdaq each down a point or two. The bond market is currently down 14/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

Where We are going:
There is no relevant economic news scheduled for release tomorrow but there are two reports scheduled for release Wednesday morning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an annual rate of 1.8% increase in worker output. Analysts are expecting to see no revision to last month’s initial reading. Employee productivity is watched closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns.

January’s Factory Orders will be posted late Wednesday morning, which will give us a measurement of manufacturing sector strength. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates. The Fed Beige Book will be posted Wednesday afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading Wednesday. Overall, look for a fairly active week unless comparing to last week’s volatility.

Forecast:
There will be some optimism leading up to Friday’s Employment report. The market is expecting to see very weak numbers Friday morning and has already built that into current pricing. The problem is that if it simply meets forecasts, or is even slightly stronger than expected, we could see bonds drop and mortgage rates rise. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days…