Minor Movement In Today's Mortgage Rates 8-30-2017
By James Brooks
The bond market is down 5/32 (2.14%), which should push Raleigh area mortgage rates higher by approximately .125 of a discount point.
Yesterday?s 7-year Treasury Note auction went pretty well with investor demand above average. This was a bit better than Monday?s 5-year Note auction, but wasn?t strong enough to cause much of a move in bonds or mortgage rates during afternoon trading yesterday.
The first of today?s two pieces of economic data was August?s ADP Employment report at 8:15 AM ET. It showed that 237,000 new private sector jobs were added to the economy last month. This was much stronger than the 180,000 that was expected, indicating the employment sector may have been better off this month than many had thought. The truth will come in Friday?s governmental report, but if we see similar results then, we could see mortgage rates move higher.
Also posted early this morning was the first revision to the 2nd Quarter Gross Domestic Product (GDP). It revealed the economy grew at a 3.0% annual rate. This was an upward revision from the initial estimate of 2.6% and stronger than forecasts of 2.8%. This means the economy was stronger during the April through June months than previously thought. Because bonds tend to thrive in weaker economic conditions, we should consider this data bad news for the bond market and mortgage rates.
There are two more reports scheduled for release early tomorrow morning. July's Personal Income and Outlays report is the more important of the two, giving us a measurement of consumer ability to spend and current spending habits. It is expected to show an increase of 0.3% in income and a 0.4% rise in spending. Since consumer spending makes up over two-thirds of the U.S. economy, weaker than expected numbers would be considered good news for the bond market and mortgage rates.
Next up is last week?s unemployment figures, also at 8:30 AM ET. They are expected to show that 236,000 new claims for unemployment benefits were filed last week, up from the previous week?s 234,000 initial claims. Since rising claims hints at employment sector weakness, the higher the number the better the news it is for mortgage rates. However, because this is only a weekly report, it likely will have little impact on tomorrow?s mortgage rates unless it shows a significant variance.
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.