Another Day Of Improvements For Mortgage Rates 3-27-2018
By James Brooks
The bond market is up 10/32 (2.81%), which should improve Raleigh Area mortgage rates by approximately .125 of a discount point.
March's Consumer Confidence Index (CCI) was posted at 10:00 AM ET this morning. The Conference Board announced a reading of 127.7, falling short of the 130.4 that was expected. That was also a decline from February?s reading, meaning that surveyed consumers were less optimistic about their own financial situations than thought. The weaker reading makes the news favorable for bonds and mortgage rates since stronger sentiment usually translates into stronger levels of consumer spending that fuel economic growth.
The first of this week?s two relevant Treasury auctions also takes place today when 5-year Notes will be sold. That will be followed by 7-year Notes tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.
The second and final revision to the 4th Quarter GDP will be released at 8:30 AM ET tomorrow. The Gross Domestic Product is the total of all goods and services produced in the U.S. and is the benchmark measurement of economic activity. It is expected to show that the economy grew at an annual pace of 2.6% last quarter, up slightly from the previous estimate of 2.5% that was released last month. Analysts are now more concerned with next month's preliminary reading of the 1st quarter than data from three to six months ago. So, unless we see a significant revision, this report probably will have little impact on mortgage rates.
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.