Good Day For Mortgage Rates 12-27-2017
By James Brooks
The bond market is up 8/32 (2.43%), which should improve Raleigh area mortgage rates by approximately .125 of a discount point.
December?s Consumer Confidence Index (CCI) was posted at 10:00 AM ET this morning. The Conference Board, who is a New York-based business research group and not a governmental agency, announced a reading of 122.1, falling well short of the 128.0 that was expected. This was also a sizable decline from November?s revised 128.6, meaning consumers were much less optimistic about their financial and employment situations than they were last month. That makes the data good news for bonds and mortgage rates because waning confidence usually translates into softer levels of consumer spending, restricting economic growth.
We also have the first of this week?s two Treasury auctions that may influence mortgage rates taking place today. 5-year Notes will be sold today while 7-year Notes go tomorrow. These sales have the potential to slightly affect mortgage pricing. If they are met with a strong demand from investors, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. But a lackluster interest in the securities may create bond selling and upward revisions to mortgage rates later today and/or tomorrow. Results will be announced at 1:00 PM each day, so any reaction will come during early afternoon trading.
Besides the 7-year Note auction, the only relevant event scheduled tomorrow is the weekly unemployment update. It is expected to show that 238,000 new claims for unemployment benefits were made last week, down from the previous week?s 245,000 initial filings. Declining claims is a sign that the employment sector is strengthening. Therefore, the higher the number of new filings, the better the news it is for mortgage rates. It is worth noting that this is only a weekly snapshot, so it usually takes a wide variance from forecasts to have a noticeable impact on mortgage pricing.
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.