More Improvement With Today's Mortgage Rates 8-10-2017

By James Brooks

The bond market is up 9/32 (2.21%), which should improve Raleigh area mortgage rates slightly.

Yesterday?s 10-year Treasury Note auction didn?t go overly well. The benchmarks we use to gauge investor demand showed there was not a strong interest in the securities. Bonds didn?t have much of a reaction to the results yesterday, but it doesn?t allow us to be too optimistic about today?s 30-year Bond sale. Results of it will be posted at 1:00 PM ET, meaning if there is a reaction to today?s auction, it will come during early afternoon trading.

The first of today?s two economic releases was July's Producer Price Index (PPI) at 8:30 AM ET. It revealed a 0.1% decline in both the overall and more important core reading that excludes volatile food and energy prices. Both readings were well below the 0.2% increase that forecasted for each, indicating inflationary pressures at the producer level of the economy were softer than many had thought. That makes the data good news for bonds and mortgage rates.

Also at 8:30 AM was the release of last week?s unemployment figures. They showed that 244,000 initial claims were made for unemployment benefits last week, up from the previous week?s revised 241,000. Analysts were expecting to see 240,000 initial filings, hinting the employment sector was a bit weaker last week. This is also favorable news for the bond and mortgage market. However, this is only a weekly report, so its impact on today?s trading has been minimal.

Tomorrow has only one release that is relevant to mortgage rates- July's Consumer Price Index (CPI) at 8:30 AM ET. The CPI is one of the most important reports we see each month as it measures inflation at the consumer level of the economy. As with today?s PPI, there are also two readings in the report. Analysts are expecting to see a 0.2% rise in both. Declines in the readings should lead to lower mortgage rates since it would mean inflation is still not a threat to the economy and another Fed rate hike may come later than sooner. On the other hand, stronger than expected readings will likely lead to an increase in mortgage pricing tomorrow.

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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