Another Good Day For Mortgage Rates 9-7-2017

By James Brooks

The bond market is up 11/32 (2.07%), we should improve Raleigh area mortgage rates by .125 of a discount point.

Yesterday?s afternoon release of the Fed Beige Book report showed a couple of favorable points. The most notable was concern about the auto industry. Besides sales being weak, there were also signs that supplies and other related providers are preparing for an extended slowdown. That is good news as any sign of economic weakness is usually favorable for bonds and mortgage rates. The report did show that broader economic activity grew modestly or moderately and that inflation remains subdued. Bonds were weakening before the release was released but recovered part of those losses after posting.

There were two minor pieces of economic data this morning, both giving us favorable results. The first was last week?s unemployment figures at 8:30 AM ET that revealed 298,000 new claims for unemployment benefits were filed last week. This was significantly higher than the 239,000 that was expected and a large jump from the previous week?s 236,000 initial filings. While the spike in claims is good news for the bond and mortgage markets, it is believed that the data is skewed by Hurricane Harvey that put many people out of work in the area. Therefore, we are not seeing the news have a major impact on today?s trading.

The second release of the morning and the final report of the week was the revised 2nd Quarter Productivity numbers. They showed that worker productivity actually rose at a 1.5% annual rate during the April through June months. That was stronger than the preliminary estimate of 0.9% and exceeded the 1.2% rise that was expected. Stronger readings are good news in this data because higher levels of productivity allow the economy to expand without inflation fears. It is worth noting that a secondary reading that tracks labor costs came in lower than predicted, adding to the good news. Lower wage costs ease broader inflation concerns in the economy that make bonds less attractive to investors.

Tomorrow has nothing of importance scheduled for release. If we see a noticeable move in mortgage pricing it likely will be a result of stocks or storm related news. There is a good possibility of having a fairly quiet day to wrap up the week.

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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