Wednesday’s bond market has opened in positive territory, extending yesterday afternoon’s strength. Stocks are heading into the holiday mixed with the Dow up 103 points and the Nasdaq down 10 points. The bond market is currently up 2/32 (4.15%), which with Tuesday’s late gains should allow this morning’s mortgage rates to be approximately .250 of a discount point lower than yesterday’s early pricing.

Yesterday’s 5-year Treasury Note auction was mostly uneventful. Several of the benchmarks we use to gauge investor demand for the securities indicated an average level of interest compared to other recent sales. We did see bonds improve after results were announced at 1:00 PM ET, leading to some lenders to make an intraday improvement in rates. We will get to do this again today when 7-year Notes are sold. If the 11:30 AM ET results posting points to a stronger demand than yesterday’s auction, we could see a slight improvement in bonds. This is especially true today because we are expecting thin trading due to the holiday schedule.

Today’s only relevant data came from the weekly unemployment update at 8:30 AM ET. It revealed only 214,000 new claims for jobless benefits were made during the week, falling short of the 225,000 that was expected. More importantly, this was a decline from the previous week’s 224,000 initial filings when they were expected to rise slightly. Declining claims for benefits are a sign of strength in the employment sector, making the data unfavorable for bonds and mortgage rates. Fortunately, traders are in a jolly mood and appear to be ignoring the news.

Stocks will trade until 1:00 PM today ahead of tomorrow’s Christmas Day holiday while bonds will go until 2:00 PM ET. The markets will reopen for regular trading Friday morning, but it is highly likely that trading will be light as many traders are home for the holiday. This simply means that we shouldn't be too excited about an improvement in rates or concerned about an increase since moves are exaggerated by the light volume and will be corrected when regular volume returns next Monday.

We would like to take this opportunity to wish you and yours a safe and wonderful holiday!

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.