A Good Monday For Mortgage Rates 10-30-2017
By James Brooks
The bond market is up 7/32 (2.39%), we should improve Raleigh area mortgage rates by approximately .125 of a discount point.
The Commerce Department gave us September's Personal Income and Outlays report at 8:30 AM ET this morning, announcing a 0.4% rise in income and a 1.0% jump in spending. Both readings exceeded forecasts of up 0.3% and 0.8% respectively, indicating consumers had slightly more to spend last month and actually did spend more than thought. However, the increase in spending is being attributed to storm-related purchases, so we are seeing little response to the data in today?s early trading.
The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET tomorrow. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.6%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week.
October's Consumer Confidence Index (CCI) will also be posted tomorrow, but at 10:00 AM ET. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a rise in confidence from last month's 119.8 reading. That would mean that surveyed consumers better about their own financial and employment situations than they did last month, indicating they are more likely to make large purchases in the near future. That would be unfavorable news for the bond market because consumer spending makes up over two-thirds of our economy. Current forecasts are showing a reading of 121.5. The lower the reading, the better the news it is for mortgage rates.
Overall, the single most important day is Friday due to the Employment report but Wednesday is expected to be pretty active also with the ISM release and FOMC meetings both taking place. We have plenty of relevant data set for release this week, making it quite likely that we will see another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if still floating a rate and closing in the near future.
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.