News Moves Today's Mortgage Rates 12-19-2017

By James Brooks

The bond market is down 14/32 (2.44%), which should push Raleigh area mortgage rates higher by approximately .250 of a discount point.

This morning?s sole economic release was November's Housing Starts at 8:30 AM ET. The Commerce Department announced a 3.3% increase in new home groundbreakings, exceeding forecasts. That is an indication the new home portion of the housing sector is stronger than many had thought, making the data slightly negative for bonds and mortgage rates.

Today?s unfavorable economic data is not exactly the source of this morning?s bond selling. The bond market looked to open with minor losses before the report was posted. However, with bonds negative already, the release did contribute to them extending their pre-market losses. As a result, the benchmark 10-year Treasury Note yield is at a pretty important resistance level (2.43%). It is the high end of the recent trading range. If we close above that level, the possibility of yields and mortgage rates moving upward is relatively high. On the other hand, if this level holds, we may see buyers step up to the plate, driving the 10-year yield back down to mid-2.30?s. Since mortgage rates tend to track bond yields, the latter would be good news for mortgage shoppers.

Tomorrow also has only one economic release that may affect mortgage rates. That will be November?s Existing Home Sales figures at 10:00 AM ET. The National Association of Realtors is expected to announce an increase in home resales last month, indicating housing sector growth. This report will give us a measurement of housing sector strength and mortgage credit demand. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual sales figures vary greatly from forecasts, the results will probably have a minor impact on mortgage rates.

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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