Another Increase In Today's Mortgage Rates 1-18-2018
By James Brooks
The bond market is down 5/32 (2.60%), which should push Raleigh Area mortgage rates higher by approximately .125 of a discount point.
Yesterday?s afternoon release of the Fed Beige Book showed that economic conditions, including inflation, strengthened at a modest-to-moderate rate in most regions since the last update. The upbeat inflation and wage growth in the report caused bonds to weaken after its release yesterday afternoon. As bond selling continued, some lenders revised rates higher as a result. This report covered activity by Fed region from late November through the end of the year.
The first of this morning?s two minor economic releases was December's Housing Starts at 8:30 AM ET. The Commerce Department announced an 8.2% decline in new home groundbreakings last month. This was a much larger decline than was expected, indicating weakness in the new home portion of the housing sector. Therefore, we can consider the data good news for bonds and mortgage rates. Unfortunately, it does not carry the importance that some of the other report do that we follow. Accordingly, the news has had little impact on the overnight negative momentum in bonds.
Today?s second release was last week?s unemployment figures, also at 8:30 AM ET. They showed that only 220,000 new claims for unemployment benefits were filed last week, falling well short of the 251,000 that was expected. It also is a significant decline from the previous week?s 261,000. Because declining claims is a sign of a strengthening employment sector, we should consider this data bad news for mortgage rates.
Tomorrow has a single moderately important release for the markets to digest. That will be January's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Good news would be a reading weaker than December's 95.9 that means consumers are less likely to make a large purchase in the immediate future. Forecasts are calling for an increase to 97.0.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.