By James Brooks

The bond market is down 4/32 (2.26%), should move Raleigh area mortgage rates slightly higher.

Today has nothing of importance scheduled that is likely to affect mortgage rates. We are seeing some pre-auction weakness in bonds, but this should be an uneventful day for the bond market and mortgage rates. If we see an intraday move in rates, it likely will be a result of stock strength or weakness.

Tomorrow has two events we need to watch, but neither are considered highly important. 2nd quarter Employee Productivity and Costs data will be released at 8:30 AM ET tomorrow morning. It will give us an indication of employee output per hour. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage rates, but it may influence them slightly during morning trading. Analysts have predicted a 0.5% rise in productivity during the second quarter and a 1.5% increase in labor costs. A sizable increase in productivity and a smaller than expected rise in costs could help improve bonds, contributing to slightly lower mortgage rates.

The first of this week’s two mortgage rate-relevant Treasury auctions is tomorrow's 10-year Treasury Note sale. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. If the sales are met with a decent demand from investors, indicating that interest in longer-term securities such as mortgage-related bonds is good, the earlier losses are usually recovered after the results are announced. Results of sales will be posted at 1:00 PM ET of each auction day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading tomorrow. However, weak levels of interest could lead to broader selling in the bond market that could push 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 place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now.