Slight Bump For Mortgage Rates 10-5-2017

By James Brooks

The bond market is currently down 6/32 (2.34%), which should push Raleigh area mortgage rates slightly higher.

The first of this morning?s two economic releases was last week?s unemployment figures at 8:30 AM ET. They showed that 260,000 new claims for unemployment benefits were filed last week. This was lower than the 265,000 that was expected and a decline from the previous week?s 272,000. The drop hints that the employment sector was a little stronger than thought last week, making the data bad news for bonds and mortgage rates. Fortunately, this is only a weekly report and had little impact on this morning?s mortgage pricing.

August's Factory Orders data was posted at 10:00 AM ET. The Commerce Department announced that new orders for both durable and non-durable goods rose 1.2%, slightly exceeding expectations of a 1.0% rise. The increase means manufacturing activity was a bit stronger than expected, making the report slightly unfavorable for mortgage rates. However, this morning?s negative tone in bonds is not a result of this data.

This morning?s bond weakness is being attributed to Fed talk that seems to support another bump to key short-term interest rates before the end of the year. The consensus is that it will come at the mid-December FOMC meeting. This shouldn?t have come as a major surprise, but we are seeing a negative reaction after what looked like was going to be a positive open for bonds.

Tomorrow brings us the release of arguably the most important monthly piece of economic news- the Employment report. The Labor Department will post September's employment stats early tomorrow morning. The report is comprised of many statistics and readings, but the most important are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate, holding at 4.4%, an increase in payrolls of approximately 90,000 and a 0.2% increase in average earnings. Weaker than expected readings should rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news.

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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