Good Day For Mortgage Rates 11-14-2017

By James Brooks

The bond market is up 8/32 (2.37%), which should improve Raleigh area mortgage rates by .125 of a discount point.

October's Producer Price Index (PPI) was posted at 8:30 AM ET this morning, revealing a 0.4% increase in both the overall and core readings. Both readings exceeded expectations of up 0.1% and 0.2% respectively. This means that inflationary pressures at the manufacturing level of the economy were stronger than thought. That makes the data bad news for mortgage rates because rising inflation erodes the value of a bond?s future fixed interest payments, causing them to be less appealing to investors. Higher levels of inflation also allow the Fed to raise key short-term interest rates more often.

Tomorrow has two monthly reports at 8:30 AM ET that may have an impact on mortgage rates. Both of them are considered to be important for the bond and mortgage markets. The first will come from the Commerce Department, who will give us October's Retail Sales. This data measures consumer level or retail spending. It is considered extremely important to the markets because consumer spending makes up over two-thirds of the U.S. economy. It is expected to show a 0.1% increase in retail-level spending, meaning consumers spent a bit more last month than they did in September. A larger increase in spending would be considered negative news for bonds because rising spending fuels economic growth and raises inflation concerns in the bond market. If tomorrow's report reveals a decline that indicates consumers spent less than thought, bonds should react favorably, pushing mortgage rates lower. If it shows a larger rise, mortgage rates will likely move higher.

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... Lock 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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