Tuesday's bond market has opened in positive territory after stocks failed to extend yesterday's gains during early morning trading. The stock markets are showing small losses with the Dow down 18 points and the Nasdaq down 5 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

This morning's only factual economic data was August's Housing Starts that showed surprising strength in new home building. Analysts were expecting to see a minor increase in starts but the 10.5% jump that today's report revealed was well above forecasts. This can be considered a sign of housing strength, but since this data is not looked at as a major release, its impact on this morning's trading and mortgage pricing has been minimal.

Fed Chairman Bernanke and friends are currently in their Federal Open Market Committee (FOMC) meeting to discuss monetary policy and key short-term intere st rates. They will adjourn at 2:15 PM ET with a statement of their actions. There is little possibility of seeing a change to key short-term interest rates. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find when the Fed's next move may come. What we particularly are looking for is further comments about the Fed buying more government or mortgage debt. If there is a clear indication that they will buy more in the immediate future, the bond market should react positively this afternoon, possibly pushing mortgage rates lower.

There is no relevant economic data scheduled for release tomorrow, so we can expect to see the stock markets influence bond trading and mortgage rates. If today's FOMC results lead to a sizable move in the markets, there is a decent possibility of that reaction carrying into tomorrow's morning trading also. Look for an update to this report today shor tly after the financial and mortgage markets have an opportunity to react to the FOMC statement.

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.