Minor Movement In Today's Mortgage Rates 4-28-2017

By James Brooks

The bond market is down 4/32 (2.31%), which should increase today's mortgage rates by approximately .125 discount point.

Yesterday?s 7-year Treasury Note auction went very well with several benchmarks showing a pretty strong interest in the securities. Bonds had already improved from early morning levels when results were posted, but that news coincided with another move higher and caused some lenders to slightly improve mortgage pricing before the end of the day.

The most important of today?s three economic releases was the preliminary version of the 1st Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It revealed the economy grew at a 0.7% annual rate compared to the 1.2% that was predicted. That headline number is good news for bonds and mortgage rates since it means the economy was not as strong as many had thought. Unfortunately, some secondary readings raised inflation concerns, causing the muted reaction to the report.

Today?s other early release was the 1st Quarter Employment Cost Index (ECI). It showed a 0.8% increase, exceeding forecasts of 0.6%. This means that employer costs for wages and benefits rose more than analysts had expected. Because rising wages is a sign of inflation, this is a negative report for bonds and mortgage rates.

April?s revised University of Michigan Index of Consumer Sentiment came late this morning. It stood at 97.0, down from the preliminary reading of 98.0 from earlier this month. It was expected to remain unchanged, not revise lower. The decline indicates that surveyed consumers were a little less optimistic about their own financial situations than thought a couple weeks ago. Since waning confidence usually translates into softer levels of consumer spending that fuels economic growth, this data is good news for the bond and mortgage market.

Next week is likely to be very active for the markets and mortgage rates. To summarize, we start with the very important ISM manufacturing index Monday, have an FOMC meeting mid-week and close with the almighty Employment report next Friday.

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.

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