Mortgage Rates Improve 1-22-2018
By James Brooks
The bond market is up 6/32 (2.65%), which should improve Raleigh area mortgage rates by .125 of a discount point.
This week has five economic reports scheduled for release that range from minor to extremely important. There are also a couple of Treasury auctions set that have the potential to influence rates. However, the big news is the government shutdown that has not been resolved yet. There is a vote scheduled in the Senate for noon ET today that may lead to an end of the shutdown. If it fails and the shutdown continues, some of this week?s data may not be released as scheduled.
There was nothing of relevance to mortgage rates scheduled for today or tomorrow. The first event will be December?s Existing Home Sales report Wednesday morning from the non-governmental National Association of Realtors. It will give us a measurement of housing sector strength by tracking home resales. Next up is the 5-year Treasury Note auction Wednesday also. Both are likely to still take place regardless if the shutdown is still in place or has ended.
Assuming the shut down carries on this week, we will still get two of the five scheduled reports. The other is December?s Leading Economic Indicators (LEI) Thursday morning. The two most important reports of the week, Durable Goods Orders and initial reading to the 4th quarter Gross Domestic Product (GDP) will be affected by the shutdown if it extends late into the week.
With so much uncertainty, it would be wise to keep a close eye on the news wires and maintain contact with your mortgage professional if closing in the near future and still floating an interest rate. The next couple of days may not be as active as some expect, but if the funding issue drags on we could see an extremely active bond and mortgage market. If it gets resolved quickly, the impact on the economy and the markets should be fairly minimal.
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.