Good Day For Mortgage Rates 8-23-2017
By James Brooks
The bond market is up 9/32 (2.18%), which should improve Raleigh area mortgage rates by .125 of a discount point.
The Commerce Department announced this morning that sales of newly constructed homes fell 9.4% last month, reaching their lowest level in 7 months. Analysts were expecting to see a small increase in sales, meaning that the new home portion of the housing sector was much softer than many had thought. Because a weak housing sector makes broader economic growth less likely, this was good news for bonds and mortgage rates. Unfortunately, this report isn?t considered to be highly important to the markets, preventing a more visible reaction.
Tomorrow has two pieces of economic data being posted. The first is last week?s unemployment figures at 8:30 AM ET. They are expected to show that new claims for unemployment benefits rose from 232,000 to 237,000. Good news for mortgage shoppers would be a sizable spike as rising claims is a sign of a weakening employment sector. Since this is only a weekly update, it often has little or no impact on mortgage rates unless it shows a sizable variance from forecasts.
Next up is that July's Existing Home Sales report at 10:00 AM ET tomorrow. The National Association of Realtors will release this report, giving us another measurement of housing sector strength. It covers a high percentage of all home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts' forecasts. It is expected to show a rise from June's sales, meaning the housing sector strengthened last month. This would generally be bad news for the bond market and mortgage rates because a strengthening housing sector makes broader economic growth more likely. But unless the increase is much larger than current forecasts, the report will likely have a minimal impact on tomorrow's 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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.