Mortgage Rates Continue To Move Higher 1- 9-2018

By James Brooks

The bond market is down down 11/32
(2.52%), which should push Raleigh Area
mortgage rates higher by approximately
.250 of a discount point.

Today has no relevant economic data
scheduled for release. We are seeing a
negative reaction to some comments made by
overseas central bankers and an extension
to overnight selling. There also could be
some pre-auction selling involved as
participants prepare for this week?s
auctions. More importantly though, the
benchmark 10-year Treasury Note yield is
right at a very important threshold this
morning. If it moves above 2.52%, there is
little to stop it from going above 2.60%.
Since mortgage rates track bond yields,
that would translate into higher mortgage
rates. In other words, the next day or so
is critical for mortgage rates direction,
especially with some very important
economic data coming later this week.

This week?s economic calendar doesn?t start
until Thursday. However, we do have a
couple of Treasury auctions scheduled that
are likely to affect mortgage rates. They
will be held tomorrow and Thursday when
10-year Notes and 30-year Bonds are sold
respectively. The 10-year sale is the more
important of the two as it will give us a
better indication for demand of mortgage-
related securities. If the sales are met
with a strong demand from investors, we
should see the bond market move higher
during afternoon trading the days of the
auctions. But a lackluster interest from
buyers, particularly international
investors, would indicate a waning
appetite for longer-term U.S. securities
and lead to broader bond selling. The
selling in bonds would result in upward
revisions to mortgage rates. Results will
be posted at 1:00 PM ET each day, so any
reaction will come during early afternoon
trading.

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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