Mortgage Rates Move Slightly Higher 9-1-2017

By James Brooks

The bond market is down 10/32 (2.15%), which should cause Raleigh area mortgage rates to come in slightly higher at .125 of a discount point.

The first of this morning?s important economic releases was August?s Employment report at 8:30 AM ET. The Labor Department announced that the U.S. unemployment rate inched up from 4.3% in July to 4.4% in August. The report also said that 156,000 new jobs were added to the economy, falling short of the 183,000 that was expected. It also showed that July?s and June?s payroll totals were revised lower by a combined total of 41,000 jobs. Furthermore, average earnings rose only 0.1% when analysts were calling for a 0.2% rise.

At 10:00 AM ET, the Institute for Supply Management (ISM) posted their manufacturing index for August. It came in at 58.8, exceeding forecasts of 56.8. That means more surveyed manufacturing executives felt business improved during the month than many had expected. Since that is a strong indication that the manufacturing sector is strengthening, it is bad news for bonds and mortgage rates. Because this is considered to be a highly important monthly release, it has had a negative impact on today's mortgage pricing.

The third report of the day and the final release of the week was the University of Michigan's revised Index of Consumer Sentiment for August. This report gave us a bit of favorable news with a reading of 96.8. That was lower than the 97.1 that was forecasted and August?s preliminary reading of 97.6. This index tracks consumer confidence in their own financial situations. The weaker reading indicates consumers are a little less likely to make a large purchase than they were earlier in the month. However, this is also the least important of today?s three reports, meaning we are not seeing much of a reaction to the news.

Overall, the employment report was good news for mortgage rates. It appears that traders weren?t all that impressed with it unfortunately. All three of headline readings in the release gave us bond-friendly results. The bond market initially reacted slightly favorably, but that was short-lived as the negative move came after the important ISM release. The third report had little impact on today?s trading.

Next week brings us the release of a couple of relevant economic reports, but none are considered to be nearly as important as this morning?s data was. The financial and mortgage markets will be closed Monday in observance of the Labor Day holiday.

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... Lock 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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