Good News Another Surprise Move On Mortgage Rates 4-18-2017
By James Brooks
The bond market is up 12/32 (2.20%), which should improve today's mortgage rates by approximately .125 of a discount point.
There were two pieces of economic data posted this morning, giving us mixed results. March's Housing Starts was the first, coming at 8:30 AM ET. The Commerce Department announced a 6.8% decline in new home groundbreakings during March. This was a larger decline than analysts were expecting, indicating that the new home portion of the housing sector may be slowing. There is a secondary reading in this report that tracks new permits issued, giving us some insight into future groundbreakings. This reading came in stronger than forecasted, but we still can consider the data favorable for bonds and mortgage rates.
March's Industrial Production data was released at 9:15 AM ET. It showed a 0.5% rise in output at U.S. factories, mines and utilities. This was slightly higher than the 0.4% that was expected. The increase does point towards manufacturing sector strength, making the data neutral to slightly negative for mortgage rates. However, this was a slight variance from forecasts in a moderately important report, so its impact on today?s mortgage pricing has been minimal.
Tomorrow?s only relevant release comes during afternoon hours. That is when the Federal Reserve's Beige Book report will be posted. This report is named simply after the color of its cover but details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Generally speaking, signs of strong economic growth or inflation rising from the last update would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be ideal for mortgage rates. The report will be released at 2:00 PM ET, so any reaction will come during mid-afternoon trading.
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