Mortgage Rates Improve On Today's News 10-19-2017

By James Brooks

The bond market is up 7/32 (2.30%), which should improve Raleigh area mortgage rates by a little less than .125 of a discount point.

Yesterday afternoon?s release of the Fed Beige Book didn?t reveal any major surprises. It showed that economic activity grew at a modest and moderate pace as reported by Fed region. The report said that the labor market remains tight but inflation still remains subdued. The release covered August 29 ? October 6th and indicated the impact from the storms was temporary. The bond market had a slight reaction to the news, weakening just a bit after the 2:00 PM ET post. However, it was not enough of a move to cause a rate change with most lenders.

There were two minor pieces of economic data posted this morning. Last week?s unemployment update was the first, coming at 8:30 AM ET. It revealed that 222,000 new claims for unemployment benefits. This was a decline from the previous week?s revised 244,000 initial filings. Forecasts were calling for 236,000. The decline indicates that the employment sector was a little stronger than expected last week. Fortunately, this is a weekly report that doesn?t draw too much attention.

The second report of the day was September's Leading Economic Indicators (LEI) at 10:00 AM ET. The Conference Board announced a 0.2% when analysts were expecting to see an increase of 0.1%. This data attempts to measure future economic activity, particularly during the next three to six months. Therefore, the weaker number if good news for bonds and mortgage rates.

Tomorrow?s sole relevant report will be September's Existing Home Sales data. This report will give us an indication of housing sector strength and mortgage credit demand by tracking home resales. It is expected to show a decline in sales from August to September, meaning the housing sector was flat. That would be relatively good news for the bond market since a strengthening housing sector makes broader economic growth more likely and bonds less appealing to investors. Ideally, it would show a sizable decline in sales that points toward a weakening housing sector.

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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