Tuesday's bond market has opened in positive territory following another round of stock losses. The stock markets are in negative territory with the Dow down 56 points and the Nasdaq down 16 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

Today's only semi-relevant economic news was November's Housing Starts. The Commerce Department said that starts of new homes fell 3.7% last month. This was also a 16 year low and indicates that the housing sector is still slowing. This is good news for the bond market and mortgage rates as it eases inflation and economic activity concerns that hurt bond prices.

There is no relevant economic news scheduled for release tomorrow. Thursday brings us two releases with the first being the final revision to the 3rd Quarter GDP. I don't think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month's first revision showed that the economy grew at a 4.9% annual pace during the quarter and this month's revision is expected to show the same.

The second report due Thursday is the Conference Board's Leading Economic Indicators (LEI) for the month of November at 10:00 AM ET. This index attempts to measure economic activity over the next three to six months. It is expected to show a slight decline in activity, meaning that it predicts slower economic activity over the next several months. This probably will not have much of an impact on bond prices or affect mortgage rates unless it exceeds current forecasts of a 0.3% decline from October's reading. If it shows a larger decline, the bond market may move slightly higher, improving mortgage rates slightly.

I have shifted to a float recommendation for the time being for mid and longer term periods as there seems to be buying interest in bonds. However, this will be watched closely and could be changed back to lock fairly quickly.

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 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.

Thursday's bond market opened fairly strong after we saw weaker than expected economic news and early stock losses. The stock markets are showing sizable losses with the Dow down 121 points and the Nasdaq down 26 points. The bond market is currently up 17/32 as investors shift funds back into bonds. However, I am not expecting to see much improvement in this morning's mortgage rates due to weakness in bonds late yesterday. This morning's gains are more or less offsetting yesterday's losses, meaning mortgage rates should remain near yesterday's morning levels.

The Commerce Department reported this morning that November's Durable Goods Orders rose 0.1%. This was much lower than the 2.2% increase that was expected and indicates that the manufacturing sector was not as strong as thought. This is good news for bonds because weak manufacturing activity translates into slower economic growth.

The Labor Department gave us their weekly reading on unemployment claims, saying that 349,000 new claims for benefits were filed last week. That was higher than expected, but this data usually has little impact on rates since it tracks only a week's worth of filings.

The Conference Board's Consumer Confidence Index (CCI) for December showed a higher reading than was forecasted, meaning consumers were more optimistic about th eir own financial situations this month than many had expected. The 88.6 December reading and the announced upward revision to November's reading shows that consumers were more confident than thought. This is considered bad news for bonds because higher levels of confidence means consumers are more apt to make large purchases in the near future.

The final report of the week comes late tomorrow morning when November's New Home Sales data will be posted. This data is not considered to be of high importance and will likely not affect mortgage rates unless it varies greatly from forecasts. It covers only approximately 15% of all home sales in the U.S., therefore, I don't think we will see much movement in rates as a result of this data. It is expected to show a decline in sales from October.

It will likely be another light day of trading tomorrow as market participants prepare for the New Year's holiday early next week. The markets are open for a full day tomo rrow but will close early Monday.

This holiday shortened week brings us only three economic releases for the markets to digest. The bond and stock markets are open tomorrow but will close early in observance of the Christmas Holiday and will reopen for normal hours Wednesday morning.

The first piece of economic data released this week will be will be posted at 8:30 AM Thursday when the Co mmerce Department will give us November's Durable Goods Orders. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. Analysts are expecting the report to show an increase in the neighborhood of 2.5%. A smaller increase would indicate that the manufacturing sector did not grow as quickly as many had thought. This would be good news for the bond market and should drive mortgage rates lower. However, a larger than expected jump in orders could fuel a stock rally and lead to mortgage rates moving higher early Thursday morning.

Also Thursday morning is the release of the Conference Board's Consumer Confidence Index (CCI) for December. This is a pretty important release because it measures consumer willingness to spend. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Since consumer spen ding makes up two-thirds of the U.S. economy, any related data is watched closely by market participants and can have a significant influence on mortgage rate direction. It is expected to show a small decline from October's level with a reading of 87.0. A higher reading would be considered bad news for bonds and mortgage rates.

The third and final report of the week is November's New Home Sales data late Friday morning. This data is not considered to be of high importance and will likely not affect mortgage rates unless it varies greatly from forecasts. It covers only approximately 15% of all home sales in the U.S., therefore, I don't think we will see much movement in rates as a result of this data.

Overall, trading volume in the markets will likely be light this week, particularly tomorrow. We will probably see the most movement in rates Thursday, but I don't think we will see significant changes any day of the week. Accordingly, I am holding the lock recomm endation for immediate and short-term periods.

Friday's bond market has opened in negative territory following the release of stronger than expected economic news and sizable stock market gains. Stocks are rallying this morning with the Dow up 166 points and the Nasdaq up 33 points. The bond market is currently down 15/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point over yesterday's morning rates.

November's Personal Income and Outlays report was released early this morning. It showed that personal income rose 0.4% last month. This was slightly lower than the 0.5% that was expected. However, the bad news came in the outlays or spending portion of the report. It revealed a 1.1% jump that was well above forecasts of a 0.7% rise. That means that consumers were spending more than thought and since consumer spending makes up two-thirds of the U.S. economy, this was bad news for bonds and mortgage rates.

The second report of the day was the revised University of Michigan Index of Consumer Sentiment for December that was released late this morning. It showed an upward revision to 75.5. Analysts were expecting no change to the 74.5 reading, meaning that consumer sentiment was stronger than previously estimated. This is also not good news for bonds because stronger confidence is believed to mean that consume rs are more apt to make large purchases in the near future.

The markets are open for a full day of trading today, but will have an early closing time Monday ahead of the Christmas holiday. Next week is a holiday shortened week with only a couple of pieces of data scheduled for release. Look for details on next week's schedule and events in Sunday's weekly preview.