Wednesday's bond market has opened in negative territory again as stock extend their gains. The stock markets are showing strength yet again with the Dow up 112 points and the Nasdaq up 13 points. The bond market is currently down 7/32, which will likely keep this morning's mortgage rates at yesterday's levels.

There is no relevant economic news scheduled for release today that is relevant to mortgage rates, but there are two reports scheduled for release tomorrow. The first is the quarterly Gross Domestic Product (GDP), which is considered to be the best indicator of economic growth. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. Current forecasts are estimating a 2.3% pace. A larger increase will probably hurt bond prices, leading to higher mortgage rates. But a smaller increase would likely fuel a bond market rally.

The second report of the day is the 2nd Quarter Employment Cost Index (ECI) that measures employers' costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.7%.

We also will get weekly unemployment claims from the Labor Department. They are expected to say that 395,000 new claims for benefits were filed last week. This would be a decline form the previous week's number, but this data usually is not of much importance to the markets unless it varies greatly from forecasts.

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 pl ace 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.

©Mortgage Commentary 2008