More Improvement For Today's Mortgage Rates 3-13-2018

By James Brooks

The bond market is up 3/32 (2.85%), which should improve Raleigh area rates by .125 of a discount point.

Yesterday?s 10-year Treasury Note auction went fairly well with several benchmarks we use to gauge investor demand showing a decent interest in the securities. The bond market didn?t have much of a reaction to the news yesterday, but it does allow us to remain optimistic about today?s 30-year Bond auction. If today?s sale goes equally well, we may see bonds improve during afternoon trading, possibly leading to a slight improvement in mortgage rates before the end of the day.

Today?s sole economic release was February's Consumer Price Index (CPI) at 8:30 AM ET. It revealed a 0.2% increase in both the overall and core readings, matching expectations. They indicate that inflationary pressures at the consumer level of the economy were modest last month. The lack of stronger than forecasted readings has allowed the bond market to open in positive ground.

Tomorrow has two early economic reports scheduled, both of which are considered to be important. The Labor Department will post February's Producer Price Index (PPI)at 8:30 AM ET. This is the sister release to today?s CPI except it measures inflationary pressures at the producer level of the economy. As with the CPI, there are two portions of the index- the overall reading and the core data. A large increase would fuel inflation concerns, making long-term investments such as mortgage-related bonds less attractive to investors. Rising inflation also could cause the Fed to make more rates hikes this year than previously expected. Therefore, increases larger than the 0.2% that are expected for both readings would be bad news for mortgage rates.

Also early tomorrow morning comes February's Retail Sales data from the Commerce Department. This data is extremely important to the financial markets because it measures consumer spending strength. Since consumer spending makes up over two-thirds of the U.S. economy, data that is related usually has a big impact on the markets. This month's report is expected to show a rise in sales of 0.3%. If it reveals a larger increase, the bond market will likely weaken and mortgage rates will move higher as it would indicate a stronger reading of economic growth than many had thought. If it shows a much weaker level of spending, I expect to see bond prices rise and mortgage rates improve tomorrow morning, assuming the PPI doesn't show a significant surprise.

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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