Another Jump In Today's Mortgage Rates 2-8-2018

By James Brooks

The bond market is down 18/32 (2.87%), which should push Raleigh Area mortgage rates higher by approximately .375 of a discount point.

Yesterday?s 10-year Treasury Note auction did not go overly well. Average is the best word to describe investor demand in the sale. Bonds did worsen after results were posted, but they were already sliding prior to the announcement. The lack of a strong interest in the securities doesn?t give us much to be optimistic about in today?s 30-year Bond sale. Results will be posted at 1:00 PM ET again. A strong demand in the securities could lead to bond strength during afternoon trading. However, a weak sale could fuel more bond selling and upward revisions to mortgage pricing.

We got a minor piece of economic data early this morning when last week?s unemployment numbers were posted. They showed that 221,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week?s 230,000 and lower than the 234,000 that analysts were expecting to see. The decline indicates a strengthening employment sector, making the data bad news for bonds and mortgage rates. However, it is worth noting that this is only a weekly snapshot, so it is not the cause of this morning?s bond losses.

Tomorrow has nothing of importance scheduled. We can?t even say stock movement will dictate bond and mortgage rate direction. There have been several occasions recently, like today, where bonds and stocks move in the same direction instead of the traditional opposite. It is concerning that this morning?s weakness has the benchmark 10-year Treasury Note yield above where it was prior to Monday?s stock sell-off. By theory, that would mean stocks are likely to collapse again since higher yields were a big part of the drop in stocks. That is better in theory than reality though. The next couple days will be very important for the financial and mortgage markets. I think yields are going to have to retreat (good for mortgage rates) or press higher. With little in terms of economic data to influence trading until mid-week, it will be interesting to see what the next few days brings us.

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.

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