Improvement in Today's Mortgage Rates 4-17-2018
By James Brooks
The bond market is up 5/32 (2.81%), which should improve Raleigh Area mortgage rates by approximately .125 of a discount point.
March's Housing Starts data was released at 8:30 AM ET this morning. It revealed a 1.9% increase in new housing groundbreakings. This was a mixed bag of data for the bond market. The percentage increase was weaker than the 2.5% that was expected (good news), but a sizable upward revision to February?s numbers means the number of actual starts was higher than predicted (bad news). Furthermore, while the increase may appear to be bad news, it is actually being attributed to multi-family housing groundbreakings. Mortgage rates are influenced more by single-family home data than multi-family. Today?s report showed a 3.7% decline in starts of single-family homes. After dissecting the report, it is best to consider the results neutral-to-slightly favorable for bonds and mortgage pricing.
The bad news came in March's Industrial Production report at 9:15 AM ET. It showed a 0.5% increase in output at U.S. factories, mines and utilities. This was a bit stronger than the 0.3% that was forecasted, indicating manufacturing sector strength. Therefore, the data is bad news for mortgage rates. Fortunately, this is only moderately important report, preventing a noticeable impact on rates.
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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.