No Change For Mortgage Rates 3-7-2018

By James Brooks

The bond market is up 2/32 (2.88%), but some selling late yesterday is going to prevent an improvement in Raleigh Area mortgage rates

The first of today?s three events was the release of February?s ADP private-sector Employment report at 8:15 AM ET. It revealed an increase of 235,000 private sector jobs last month, exceeding forecasts of 193,000. The higher payroll number makes the data bad news for bonds and mortgage rates because it points towards a stronger than expected employment sector. However, this report tracks only private-sector jobs and comes from a non-governmental agency. It also isn?t very accurate in predicting results in the government?s monthly Employment report that follows a couple days later. Therefore, we have seen only a minor reaction to the news. It did help erase some overnight gains in bonds but not enough to push them into the negative.

Also posted early this morning was the revised Productivity index for the 4th Quarter of last year. It showed a small upward revision to bring the index to unchanged. It was previously estimated with a decline of 0.1%. With this portion of the index, a stronger number is better news for mortgage rates. Unfortunately, a secondary reading that tracks labor costs showed a noticeable upward revision from its initial estimate. That means we need to consider this data bad news also.

The Fed Beige Book is the next report scheduled for release, coming at 2:00 PM ET today. This report details economic activity throughout the country by Federal Reserve region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during mid-afternoon hours. It probably will not cause a major sell off in the stock or bond markets, but has the potential to affect rates.

Tomorrow?s only release will be last week?s unemployment update. It is expected to show that 220,000 new claims for unemployment benefits were filed last week, up from the previous week?s 210,000 initial claims. This report usually doesn't cause much movement in the markets or mortgage rates unless it shows a significant jump or drop in initial claims for benefits. The higher the number of claims, the better the news it is for bonds and mortgage rates since rising claims is a sign of employment sector weakness. The markets will be much more focused on Friday?s monthly employment numbers.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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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