Minor Movement On Today's Mortgage Rates 4-12-2017
By James Brooks
The bond market is currently up 4/32 (2.28%), we should see an improvement in today's mortgage rates of approximately .125 of a discount point.
There is no relevant economic data being posted today. We do have the 30-year bond auction taking place that may influence mortgage rates this afternoon. Yesterday?s 10-year Note sale wasn?t overly strong or weak. The benchmarks we use to gauge investor demand showed an average level of interest in the securities. If today?s sale does better than yesterday?s auction did, we could see bond prices rise and mortgage rates revise slightly lower during early afternoon trading. However, a weak demand from investors may lead to an upward move in mortgage pricing later today.
Tomorrow has three pieces of mortgage-relevant economic data scheduled, one of which is an important inflation index. That would be March's Producer Price Index (PPI) at 8:30 AM ET. It will give us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices since it erodes the value of a bond's future fixed interest payments and causes the Fed to raise key short-term rates sooner. A good size decline in prices would be good news for the bond market and mortgage rates. Current forecasts are calling for no change in the overall reading and a 0.2% rise in the core data.
The second release will be last week?s unemployment figures, also at 8:30 AM ET. They are expected to show that 251,000 new claims for benefits were filed, up from 234,000 of the previous week. Ideally, we want to see a larger increase in initial claims, indicating employment sector weakness. The higher the number of claims, the better the news it is for mortgage rates. It is worth noting though that this is only a weekly snapshot, so I am not expecting it to have much of an impact on tomorrow?s mortgage pricing.
Next up is the release of the University of Michigan's Index of Consumer Sentiment just before 10:00 AM. This index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial or employment situations, they probably will delay making that purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a sizable decline from March's 96.9 reading. Current forecasts are calling for a reading of approximately 96.3.
The bond market will close early tomorrow, ahead of the Good Friday holiday. The stock and bond markets will be closed all day Friday and will reopen for regular trading Monday. It is common to see some pressure in bonds as investors make moves to protect themselves over the long holiday, so don't be surprised if bonds weaken slightly early tomorrow afternoon before closing. This is particularly true since there is significant data being released Friday when the markets are closed.
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