End Of Week Mortgage Rate News 1-26-2018

By James Brooks

The bond market is down 7/32 (2.64%), which should push Raleigh Area mortgage rates higher by approximately .125 of a discount point.

Yesterday?s 7-year Treasury Note auction went very well with several benchmarks indicating a strong level of interest in the securities. Bonds made a nice move for the better right after results were posted, so we can attribute the auction results to at least part of yesterday?s rally.

There were two important economic releases posted early this morning. The initial reading to the 4th quarter Gross Domestic Product (GDP) reading showed that the economy grew at an annual rate of 2.6%. That was softer than the 3rd quarter?s 3.2% and fell short of the 2.9% that was expected. Because bonds tend to thrive in weaker economic conditions, the slower rate of growth is good news for the bond and mortgage markets.

Also posted at 8:30 AM was December's Durable Goods Orders that showed a 2.9% increase in new orders for big-ticket products such as appliances and airplanes. That was stronger than the 0.9% increase that was forecasted. The larger increase is technically bad news for bonds since it points towards a stronger manufacturing sector. However, this data is known to be quite volatile, so the size of the variance is not nearly as relevant as it would be in many other reports. Also, a secondary reading that excludes more costly transportation-related orders such as airplanes, nearly matched expectations. Still, the large headline number requires us to consider the data slightly negative for bonds and mortgage rates.

Next week looks to be pretty active also. We get a couple of highly important releases in the monthly ISM manufacturing index and government Employment report along with several moderately important releases. We also have the new year?s first FOMC meeting taking place. The week kicks off with the release of December?s Personal Income and Outlays report early Monday morning.

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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