After Christmas Mortgage Rates Improve 12-26-2017

By James Brooks

The bond market is up 4/32 (2.47%), which may improve Raleigh area mortgage rates slightly from Friday?s rates.

This week?s only relevant monthly economic report comes late tomorrow morning when the Conference Board will post their Consumer Confidence Index (CCI) for December. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for a decline in confidence from November's reading of 129.5. Analysts are expecting Wednesday's release to show a reading of 128.0, meaning consumers felt less optimistic about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

We also have the first of this week?s two Treasury auctions that may influence mortgage rates. Tomorrow's 5-year and Thursday's 7-year Note sales have the potential slightly affect mortgage pricing. If these sales are met with a strong demand, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. But a lackluster demand from investors may create bond selling and upward revisions to mortgage rates tomorrow and/or Thursday. Results will be announced at 1:00 PM each day, so any reaction will come during early afternoon trading.

Overall, I am expecting tomorrow to be the most active day for mortgage rates, although I don't see much to be worried about in this week's calendar. It is difficult to label any day as the calmest with several days of nothing scheduled to drive trading. Still, the markets can get active at any time, so please maintain contact with your mortgage professional if still floating an interest 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.

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