Slight Bump In Today's Mortgage Rates 10-24-2017

By James Brooks

The bond market is down 8/32 (2.40%), which should push Raleigh area mortgage rates high by approximately .125 of a discount point.

There is nothing of importance set for release today that is likely to influence mortgage rates. We are seeing bonds react negatively to corporate earnings, moderately stronger economic data overseas and concerns that the European Central Bank (ECB) may start tapering their bond buying program soon (sign of economic strength). News here of potential changes to our tax system is also still lingering in the market. The result is the benchmark 10-year Treasury Note yield reaching its highest level since late March.

Tomorrow brings us the release of two pieces of economic data, one of which is much more important than the other. Durable Goods Orders report for September will be posted at 8:30 AM ET tomorrow. It gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for an increase of 1.3% in new orders for products such as airplanes, appliances and electronics. If we see a large increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a significant decline should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance in order either way, likely will have little effect on tomorrow?s bond trading or mortgage pricing.

September's New Home Sales will be second release, also from the Commerce Department. This report covers the small percentage of home sales that last week's Existing Home Sales report didn't include. It is expected to show a small decline in sales of newly constructed homes, but I don't see this report having much of an impact on mortgage rates regardless what it shows. I believe the markets will be much more focused on the Durable Goods Orders data.

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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