Good Day For Mortgage Rates 5-30-2017

By James Brooks

The bond market is up 7/32 (2.22%), which should improve today's mortgage rates by .125 of a discount point.

This morning brought us two pieces of economic data, starting with April's Personal Income and Outlays data at 8:30 AM ET. The Commerce Department announced a 0.4% rise in both income and spending, matching expectations. Both readings are moderate increases in data that the bond market prefers to see weaker numbers. And an inflation component in the data showed a slightly stronger reading than predicted. However, the impact it has had on this morning?s mortgage rates has been minimal.

The Conference Board posted their Consumer Confidence Index (CCI) at 10:00 AM ET this morning. It gave us good news with a reading of 117.9 for May that fell short of the 119.5 that was forecasted. It was also a decline from April?s revised 119.4. Today?s numbers indicate that consumer confidence was weaker than thought during May and April. Since waning confidence usually translates into softer levels of consumer spending, we can consider this data favorable for bonds and mortgage rates.

Tomorrow's only relevant report is the Federal Reserve's Beige Book, which is named simply after the color of its cover. This report details economic conditions throughout the U.S. by Federal Reserve region. It is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. If it shows surprisingly softer economic activity since the last report, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing or rapidly expanding economic activity in many regions, we could see mortgage rates revise higher tomorrow afternoon.

Overall, it appears that Friday is the key day of the week with regards to mortgage rate movement due to the significance of the monthly Employment report. However, Thursday could also be a pretty active day for mortgage pricing. Tomorrow will probably be the lightest day, particularly the morning, unless something unexpected happens with stocks. We have some key data being posted this week. Therefore, it would be prudent to continue to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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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