Monday's bond market has opened up sharply following a steep sell-off in stocks during early trading. The stock markets are reacting to news that Lehman Brothers filed for bankruptcy and other related financial sector news. This has pushed the Dow lower by 250 points and the Nasdaq down 33 points. The bond market is currently up 48/32, which should improve this morning's mortgage rates by approximately .500 of a discount point.

The news the Lehman was unable to find buyers for its businesses and filed for bankruptcy protection has significantly raised concerns that the financial sector of the market is nowhere near stabilizing and has many fearing that more collapses may be coming in the near future. There are concerns about other banks and financial services companies on the verge of collapse that could create turmoil in international markets also. The benefactor to this news and concern is the bond market as investors seek safe-haven from the volatili ty. Whether this spike in bond prices will hold is unknown at this time, but what is a safe bet is that more news like this weekend's reports could make mortgage-related bonds much more attractive to investors and may lead to a downward trend in mortgage rates.

Also contributing to this morning's bond gains was a much larger decline in industrial production than analysts had expected. This morning's release of August's Industrial Production report revealed a 1.1% decline in factory output. This was much weaker than analysts' forecasts of a 0.3% decline and indicates that the manufacturing sector was weaker than thought in August. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns.

Tomorrow morning brings us the release of August's Consumer Price Index (CPI). This is one of the most important reports we see each and every month. It is considered to be a key indicator of inflation at the consumer le vel of the economy. There are two readings in the report- the overall index and the core data reading. Current forecasts are calling for 0.1% decline in the overall reading and a 0.2% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates tomorrow, while a smaller increase would be good news.

The FOMC meeting will adjourn at 2:15 PM tomorrow. There is little debate about a possible change to key short-term interest rates at this meeting. The overwhelming consensus is that there will be no change to rates at this meeting. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find the Fed's expected next move. The wild card is how the markets react to the statement. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates tomorrow afternoon and Wednesday morning.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Tuesday's bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday's walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday's losses. The bond market benefited form yesterday's stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Today's only economic news was September's Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management's (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don't think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Monday's bond market has opened up sharply following another stock sell-off that has made the safety of bonds more attractive to investors. The stock markets are showing sizable losses following weekend news of another potential bank issue that has the Dow down 286 points and the Nasdaq down 83 points. The bond market is currently up 37/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point.

Today's only relevant economic news was August's Personal Income and Outlays data. It showed that personal income rose more than expected with a 0.5% jump. This was bad news for bonds because it indicates that consumers have more income to spend. However, offsetting that reading was the spending portion of the report that showed no change in spending between July and August. This is good news since the reports was expected to show a 0.2% increase in spending.

Tomorrow's big news is the Consumer Confid ence Index (CCI) for September. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show a decline from last month's reading, indicating that consumers are less likely to make large purchases in the near future. This is good news for the bond market and mortgage rates. Analysts are calling for a reading of approximately 55.0, down from August's 56.9. If we see a larger than expected decline, we should see the bond market move higher and mortgage rates drop tomorrow.

The Institute for Supply Management (ISM) will post their manufacturing index for September late Wednesday morning. This index gives us an indication of manufacturer sentiment. Analysts are expecting little change from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data i s important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall Wednesday morning.

Overall, it is going to be a very active week in the markets and mortgage rates. The most important day will likely be Friday due to the employment report being scheduled, but tomorrow and Wednesday's data can also fairly heavily influence mortgage rates. With important data being released each day of the week, and what appears to be another volatile week in stocks, I would recommend maintaining contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was takin g 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.

©Mortgage Commentary 2008

Friday's bond market has opened in positive territory following a negative open in stocks and weaker than expected economic news. The markets are reacting more to news of the possible failure of the Fed bailout than today's economic data. The stock markets are showing losses with the Dow down 32 points and the Nasdaq down 16 points. The bond market is currently up 11/32, but I don't believe we will see much of a change in this morning's mortgager rates.

Neither of today's economic releases are considered to be of high importance, but both gave us results that were favorable to bonds. The first was the final revision to the 2nd Quarter Gross Domestic Product (GDP) that showed a revised rate of growth of 2.8%. This was a sizable downward revision to the previous estimate of a 3.3% annual rate and lower than analysts had expected for this revision. This means that the economy grew at a slower rate than many had thought during the 2nd quarter of the year.

The second report of the day and the final report of the week was the revised reading of the University of Michigan's Index of Consumer Sentiment. The preliminary reading that was released earlier this month revealed a 73.1 reading, but today's update showed a 70.3 reading. This was also lower than forecasts and hints that consumers are less optimistic about their own financial situations than thought, which usually means they are less likely to make large purchases in the near future.

Next week is packed with economic news for the markets to digest. There is relevant data scheduled for release every day of the week, beginning with August's Personal Income and Spending data Monday morning. Look for details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

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Wednesday's bond market has opened in positive territory in what hopefully is a sign of stabilization. The stock markets are mixed with the Dow down 40 points and the Nasdaq up 8 points. The bond market is currently up 6/32, but we will likely see this morning's mortgage rates move higher by approximately .125 - .250 of a discount point due to weakness late yesterday.

Today's only economic news was the release of August's Existing Home Sales report. The National Association of Realtors reported that home resales in the U.S. fell more than expected last month. This indicates that the housing sector has still not bottomed out. That is good news for bonds because a soft housing sector will likely slow economic activity and ease inflation concerns.

Fed Chairman Bernanke is speaking to a Joint Economic Committee of Congress today, where he has basically warned that the Fed bailout program needs to be enacted quickly to stabilize the financial system. His words have led to some fluctuation in the markets this morning, but don't seem to be of significant surprise to traders. Accordingly, I don't believe we will see any further changes to mortgage rates as a result.

August's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop tomorrow. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

Also tomorrow morning will be the release of August's New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with today's Existing Home Sales data, this report will likely not have a significant impact on m ortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Tuesday's bond market has opened up slightly as the markets try to stabilize. The stock markets are showing gains with the Dow up 36 points and the Nasdaq up 10 points. The bond market is currently up 7/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release again today. The rest of the week brings us the release of five economic reports for the markets to digest. Three of them are considered to be of low importance and likely will have little impact on mortgage rates. With none of the data being released until Wednesday, we will likely see the most activity in rates the latter part of the week.

The first piece of data comes tomorrow morning with the release of August's Existing Home Sales report. The National Association of Realtors posts this data, giving us an indication of housing sector strength by tracking home resales in the U.S. It is exp ected to show a decline from July's sales, however, this data is not considered to be of high importance to the bond market.

August's Durable Goods Orders will be posted early Thursday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop Thursday. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

Also Thursday morning will be the release of August's New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with Wednesday's Existing Home Sales data, this report will likely not have a significant impact on mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Friday's bond market has opened sharply lower following a huge rally in stocks. The stock markets are reacting favorably to the news of further Fed intervention in the banking crisis. This has pushed the Dow higher by 375 points and the Nasdaq up 71 points. The effect on bonds has not been pretty. The bond market is currently down 53/32, which will likely push this morning's mortgage rates higher by approximately .625 of a discount point or slightly more than 1/8 of a percent in rate.

The stock market reaction to the Fed news isn't exactly surprising. Neither is the bond market's reaction to the stock rally. The same funds that were shifted into bonds while stocks were tanking are now being moved out and back into stocks. This has driven bond yields and mortgage rates much higher. I suspect that the markets will stabilize sometime early next week, as long as we don't get more news.

I would not be surprised to see upward revisions to mortgage rates this afternoon. Accordingly, I am holding the lock recommendations until the markets seem to calm down. Once this happens, I most likely will be shifting back to a float position for longer term periods and possibly short-term periods. The decision will be made once the markets settle down and we can see where the major indexes and bond market stand.

Next week is pretty light in terms of economic releases. There are a handful of reports scheduled, but they don't begin until mid-week and only one of them is considered to be of high importance. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Thursday's bond market has opened in negative territory as the markets go through another day of significant volatility. The stock markets are currently showing gains, but are well off earlier highs. The Dow is currently up 66 points but is down over 100 points from its earlier high. The Nasdaq is now up 7 points but has slipped nearly 40 points from its peak of the morning. The bond market is currently down 10/32, however, we will likely see little change in mortgage rates due to strength late in the day yesterday.

This morning's economic news was actually favorable to bonds, but the seesaw activity in stocks and the fact that neither of today's releases are considered to be very important has prevented bonds from reacting to the data in a positive way. The Labor Department said that 455,000 new claims for benefits were filed last week. This exceeded analysts' forecasts but since the data tracks only a week's worth of claims, its impact on bonds and mor tgage rates usually is fairly minimal.

Also posted this morning was August's Leading Economic Indicators (LEI) that showed a 0.5% drop. This index attempts to measure economic activity over the next three to six months, meaning economic activity is being predicted to slow fairly quickly during the near future. That is considered good news for bonds, especially since it was expected to fall only 0.2%. But again, stocks and financial sector news is taking the lead in bond trading.

There is no relevant data scheduled for release tomorrow. This leaves stocks to again heavily influence trading. Generally speaking, falling stock prices should push bonds higher and mortgage rates lower as investors shift funds for safety. But if stock prices rise, those same funds will likely be pulled from bonds to be put back into stocks, leading to upward revisions to mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Wednesday's bond market has opened in positive territory following significant losses in the stock markets. The Dow is currently down 281 points while the Nasdaq has lost 70 points. The bond market is currently up 9/32, but we will still see an extremely large increase in mortgage rates compared to yesterday's. Overall, this morning's rates should be approximately one full discount point higher, or a quarter of a percent in rate.

This morning's stock weakness is a result of more concerning news in the financial sector, particularly the need for the Fed to intervene in the AIG crisis and other related issues. The stock markets managed to rally late yesterday after the Fed meeting adjourned, leading to selling in bonds that affected this morning's mortgage pricing. Despite today's stock weakness, the bond market cannot overcome its concerns nor erase the losses from yesterday that are helping to drive mortgage rates higher this morning.

Today's only relevant economic news was the release of August's Housing Starts that showed new starts for homes fell to a 17 year low last month. This was a level that was much weaker than analysts had expected. However, because this data is not considered to be of high importance to the markets, its impact on this morning's mortgage rates has been limited.

The Labor Department will give us weekly unemployment claims tomorrow morning. They are expected to show that 440,000 new claims for benefits were filed last week. This would be a slight decline from the previous week.

Late tomorrow morning, the Conference Board will release its Leading Economic Indicators (LEI). This index attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market will probably fall and mortgage rates will rise slightly. If it shows weaker than expected readings, the bond market may rally and mortgage rates should f all. Current forecasts are calling for a 0.2% decline from July's reading.

I am still expecting to see more volatility in the markets and potentially mortgage rates. Accordingly, please maintain fairly constant contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Tuesday's bond market has opened in positive territory again as yesterday's frantic buying has carried into this morning's trading. The stock markets are showing modest gains compared to yesterday's massive sell-off that had the Dow closing down over 500 points. The Dow is currently up 35 points while the Nasdaq has gained 6 points. The bond market is currently up 9/32, which will likely improve this morning's mortgage rates by another .250 of a discount point.

Today's only relevant economic data was August's Consumer Price Index (CPI). It showed a decline in the overall reading of 0.1% and an increase of 0.2% in the core data reading. Both of these readings matched forecasts, therefore, they have had little impact on the bond market or mortgage rates.

The biggest influence on this morning's trading is still the financial sector woes and the stock markets. There is still talk of more bank and financial company collapses that could still create widespread panic in the markets. The spotlight is currently on insurance giant AIG and its ability to continue to remain solvent. Whether or not that will be accomplished remains to be seen. However, the markets often overreact to a crisis and then correct. The stock volatility that came as a result of news from the past few days has certainly benefited bonds as investors seek safe-haven. But, I suspect that this may end in the immediate future, hence the extended lock recommendation yesterday. I am going to hold the lock recommendations for the time being as any type of correction in stocks could drive bond prices sharply lower and create a significant spike in mortgage rates.

The FOMC meeting will adjourn at 2:15 PM today. The recent financial and bank news has some analysts now thinking that the Fed may lower key short-term interest rates at this meeting. I don't believe that to be the case and that the Fed will leave rates unchanged. However, I would no t be surprised to see the post-meeting statement address the recent events. Depending on what is said or addressed in the statement, we may see another round of volatility in stocks and bonds during afternoon trading today.

Look for an update to this report shortly after the markets have an opportunity to react to the FOMC meeting's results.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock 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.

©Mortgage Commentary 2008

Friday's bond market has opened fairly flat despite sizable stock losses during early trading. The stock markets are showing losses as investors worry about the future of Lehman Brothers. There is growing concern that the 158-year old financial institution will fail if not sold or if other drastic measures are not taken very soon. The result is renewed fears about the stability of U.S. banks that has pushed the Dow down 124 points and the Nasdaq down 22 points. The bond market is currently down 2/32, but we will still .likely see a small improvement in this morning's rates as a result of strength late yesterday.

The Commerce Department gave us today's first piece of relevant economic news with the release of August's Retail Sales data. They reported that sales fell 0.3% last month when it was expected to rise by the same amount. This means that consumers were much less active than many had thought. However, this is good news for the bond market and mortgag e rates.

The second of today's three releases was August's Producer Price Index (PPI). It showed a 0.9% drop in the overall reading, meaning that prices paid at the producer level of the economy fell by a wider margin than what was thought. This is good news for the bond market, but the more important core data reading matched forecasts with an increase of 0.2%. Overall, this report can be considered somewhat favorable to bonds and mortgage rates.

The last report of the week was the University of Michigan's Index of Consumer Sentiment late this morning. It indicated that consumers were much more optimistic about their own financial situations than many analysts had expected. The 73.1 reading was much higher than the 64.0 that was expected. This reading is considered bad news for bonds and mortgage rates because consumers tend to spend more when they have more faith in their own financial situation.

Next week is fairly active in terms of e conomic releases with several scheduled that can influence mortgage rates. The first comes Monday morning with the release of August's Industrial Production report. It will be posted mid-morning Monday and is considered to be of moderate importance to the markets. Look for more details on next week's events in Sunday's weekly preview.

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

©Mortgage Commentary 2008

Wednesday's bond market has opened in negative territory as investors sell holdings to capture profits from the recent rally. Stock gains are also contributing to the weakness in bonds with the Dow up 80 points and the Nasdaq up 12 points. The bond market is currently down 20/32, but we will likely see a slight improvement in mortgage rates due to strength in bonds late yesterday.

There is no relevant economic news scheduled for release today. Tomorrow brings us the the release of the first economic report of the week but it is not considered to be of high importance. July's Goods and Services Trade Balance data will be posted tomorrow morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $58.0 billion, which would be an increase from June's $56.8 billion. However, I would consider this the least important of this week's releases, meaning it will likely have little impact on bond trading or mortgage rates. < br />
Also tomorrow is the release of weekly unemployment figures. The Labor Department is expected to show that 440,000 new claims for benefits were filed last week. A significantly higher or lower number may influence trading enough to affect mortgage rates. However, it is more likely that this release will have little impact on rates, especially with the important data that is scheduled for release Friday morning.

We will see three relevant reports posted Friday, two of which are very important to the markets. They are August's Retail Sales report and Producer Price Index (PPI) and September's University of Michigan Index of Consumer Sentiment. This makes Friday the most important day of the week, meaning we may see plenty of movement in rates Friday.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my cl osing 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.

©Mortgage Commentary 2008

Tuesday's bond market has opened in positive territory following early stock losses. The stock markets are giving back a good portion of yesterday's gains with the Dow down 95 points and the Nasdaq down 21 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today or tomorrow. The government did release some interesting information regarding the U.S. budget deficit. It estimated that the deficit was going to stand at $407 billion this fiscal year (October 1st through September 30th), which is an increase of over 150% from last year's deficit. This news may come into play more often in the near future and could negatively affect bonds since the government will likely need to issue more debt to cover the deficit.

The first economic report of the week is not considered to be of high importance. July's Good s and Services Trade Balance data will be posted Thursday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $58.0 billion, which would be an increase from June's $56.8 billion. However, I would consider this the least important of this week's releases, meaning it will likely have little impact on bond trading or mortgage rates.

Overall, the latter part of the week will likely be pretty active for the bond market and mortgage rates. Friday's Retail Sales and PPI reports are the week's most important and make Friday the biggest day of the week. If we see weaker than expected readings in that data, we should see mortgage rates move lower for the week. However, stronger than expected readings will likely drive bond prices lower and mortgage rates higher.

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

©Mortgage Commentary 2008

Thursday's bond market has opened on positive territory following another round of early stock losses. The stock markets are posting sizable losses during early trading with the Dow down 220 points and the Nasdaq down 40 points. The bond market is currently up 7/32, which with yesterday's late gains should improve this morning's mortgage rates by approximately .250 - .375 of a discount point.

Yesterday afternoon's release of the Fed Beige Book report indicated that the economy continues to slow and that inflationary pressure still remain elevated. Neither of those points really come as a surprise, but the comments about the economy slowing and words used such as soft and weak, helped bonds prices to move higher yesterday afternoon.

The 2nd Quarter Productivity numbers were posted this morning, showing a surprising jump in worker output. The 4.3% rise was well above forecasts and is good news for bonds and mortgage rates because higher levels of p roductivity allow the economy to grow without inflation fears.

The Labor Department reported that 444,000 new claims for unemployment benefits were filed last week. This was a sizable increase from the previous week, especially when analysts were expecting to see a decline in claims.

The Labor Department will also post August's Employment report tomorrow morning. This report will give us the unemployment rate, number of new jobs added or lost and average hourly earnings during August. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. If we are that fortunate, I expect to see mortgage rates drop considerably tomorrow morning. Analysts are expecting to see the unemployment rate remain at 5.7% and 75,000 jobs lost in the month. Weaker then expected readings would be very good news for bonds and mortgage rates.

If I were considering f inancing/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.

©Mortgage Commentary 2008