More Improvement In Today's Mortgage Rates 10-13-2017

By James Brooks

The bond market is up 4/32 (2.28%), which should improve Raleigh area mortgage rates by approximately .125 of a discount point.

Yesterday?s 30-year Treasury Bond auction went well with several indicators pointing towards strong investor demand. The bond market did not have too much of a reaction to the news but we did see prices improve later in the afternoon. That led to a few lenders improving pricing before the end of the day. If your lender did revise lower yesterday afternoon, you should see less of an improvement in this morning?s pricing than those whose lenders did not.

The first of this morning?s three economic reports was September?s Retail Sales data. The Commerce Department announced an increase of 1.6% in retail-level sales last month. That matched forecasts, but a secondary reading that excludes more volatile and costly auto transactions came in a little stronger than thought (up 1.0% vs 0.8%). Because stronger consumer spending fuels economic growth, we should consider the data neutral to slightly negative for mortgage rates. However, the data is believed to be skewed by storm-related purchases, minimizing the impact it has had on today?s trading.

September's Consumer Price Index (CPI) was also posted at 8:30 AM ET. It showed a 0.5% rise in the overall reading and 0.1% increase in the more important core data. Both readings fell 0.1% short of forecasts, hinting that inflationary pressures were not as bad as thought at the consumer level of the economy. That makes the data slightly favorable for bonds and mortgage pricing.

The final release of the week came from the University of Michigan at 10:00 AM ET. They posted their Index of Consumer Sentiment for October, revealing a reading of 101.1 that was a surprise to many and a big move from September?s 95.1 This means surveyed consumers were much more optimistic about their own financial situations this month than they were last month. That is bad news because rising sentiment usually translates into stronger levels of consumer spending.

Next week brings us a handful of relevant economic reports, but none are considered key or highly important. Monday has nothing scheduled that we need to be concerned with.

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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