More Improvement For Today's Mortgage Rates 3-1-2018

By James Brooks

The bond market is up 6/32 (2.82%), which should improve Raleigh area rates by .125 of a doscount point.

January's Personal Income and Outlays report started this morning?s activities. The Commerce Department announced at 8:30 AM ET that personal income rose 0.4% while spending rose 0.2% during the month. The income reading was a bit stronger than the 0.3% that was expected, meaning consumers had more money to spend than thought. However, the spending reading matched forecasts, allowing us to consider the report neutral-to-slightly negative for bonds and mortgage rates.

The second early release of the day was last week?s unemployment figures that showed only 210,000 new claims for unemployment benefits were filed last week. This was lower than the previous week?s revised 220,000 initial filings and short of the 227,000 that was expected. Because a decline in claims is a sign of a strengthening employment sector, this is also negative news for mortgage rates. Fortunately, this is only a weekly snapshot, limiting its influence on today?s trading.

Today?s big news was the Institute for Supply Management?s (ISM) manufacturing index at 10:00 AM ET. It came in at 60.8, up from January?s 59.1, indicating more surveyed manufacturing executives felt business improved last month than did in January. Analysts were expecting to see the index slip lower, not rise. Accordingly, we have to consider this bad news for bonds and mortgage pricing also.

We also have day two of the Fed?s semi-annual congressional testimony taking place today. Fed Chairman Powell is speaking to the Senate Banking Committee this morning. However, it is not likely that this event will cause a noticeable move in the markets. What the markets wanted to hear was presented in Tuesday?s appearance before the House Financial Services Committee.

Tomorrow?s sole relevant release will be the University of Michigan's revision to their Index of Consumer Sentiment for February at 10:00 AM ET. Current forecasts show this index slightly lower from its preliminary estimate of 99.9 that was posted two weeks ago. It is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend, but is not considered to be a major market mover.

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.

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