Tuesday's bond market has opened in positive territory following the release of weaker than expected housing news and a mixed open in stocks. The stock markets are showing little direction after yesterday's late slide that erased a gain of more than 100 points in the Dow. The Dow is currently down 9 points while the Nasdaq has gained 7 points. The bond market is currently up 8/32, which should improve this morning's mortgage rates by approximately .250 of a discount point from yesterday's morning rates.

Today's only relevant economic news came from the National Association of Realtors who reported that resales of existing homes fell 2.2% last month. This fell well short of forecasts of a 5.4% increase, meaning that the housing sector is not nearly as strong as many had thought. That bodes well for the bond market and mortgage rates because a weakening housing sector will make a much broader economic recovery more difficult to achieve. This is especially t rue that the housing credits that are thought to have supported the housing sector are now expiring. If we see further weakness in housing sales and prices, analysts will likely push back their estimate for when the Fed will need to start raising key rates.

There is a two-day FOMC meeting that begins this morning and will adjourn tomorrow afternoon. It is widely expected that Mr. Bernanke and company will not raise key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy or inflation, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing tomorrow afternoon.

Tomorrow's only economic report is the release of May's New Home Sales. It is similar to today's Existing Home Sales report, but t ells us how well sales of newly constructed homes were last month. It is expected to show a decline in sales, but will likely not have much of an impact on mortgage rates because this data tracks only the 15% of home sales that today's data did not cover.

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.