Increase In Today's Mortgage Rates 1-29-2018
By James Brooks
The bond market is down 11/32 (2.70%), which should push Raleigh Area mortgage rates higher by approximately .250 of a discount point.
We did have a relevant economic report post this morning when the Commerce Department gave us December's Personal Income and Outlays data at 8:30 AM ET. It showed a 0.4% increase in income and a 0.4% rise in spending. The income reading matched forecasts, but analysts were expecting to see a 0.5% increase in spending. The readings indicate consumers had more money to spend last month than they did in November and they did spend more. However, they didn?t spend quite as much as predicted. That allows us to consider the data neutral for bonds and mortgage rates.
The rest of the week is extremely busy with eight more economic reports for the markets to digest, including two highly important releases later in the week. In addition to the data, there is also an FOMC meeting that definitely has the potential to disrupt the markets. We have something of importance set for each day of the week, making it likely that we will see plenty of movement in mortgage rates (as we are seeing right out of the gate).
January's Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December's reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 124.0 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher Tuesday.
Overall, we have three days later in the week that could end up being the most active for mortgage rates, despite this morning?s action. Friday and Wednesday are the best candidates, but Thursday could bring a noticeable move in rates also. The calmest day looks to be tomorrow as of now, unless something unexpected happens. With so much going on this week, it would be wise 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... 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.