Improvement For Today's Mortgage Rates 3-8-2018
By James Brooks
The bond market is up 5/32 (2.85%), which should improve Raleigh area rates by .125 of a discount point.
Yesterday?s afternoon release of the Fed Beige Book failed to show any significant surprises. It did indicate widespread tight employment conditions and wage pressures in many Fed regions. While those are not favorable conditions for the bond market, they came as no surprise. Accordingly, the bond and mortgage markets had a minimal reaction to the news during afternoon trading Wednesday.
Last week?s unemployment update was today?s only relevant economic data. It showed that 231,000 new claims for unemployment benefits were filed last week, up noticeably from the previous week?s 210,000 initial filings and higher than the 220,000 that was expected. That is good news for the bond market because rising claims is a sign of employment sector weakness. However, because this is only a weekly snapshot, it has had a minimal impact on today?s mortgage rates.
Tomorrow brings us a major economic report with the release of February?s monthly Employment data. This is where we will get the U.S. unemployment rate, number of new jobs added or lost during the month and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no increase in earnings. Current forecasts are calling for a 0.1% decline in the unemployment rate from January's 4.1%, approximately 210,000 new jobs added to the economy and a 0.2% rise in earnings. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the economy's ability to continue to grow that would have an opposite impact on the markets and mortgage pricing.
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.