Slight Improvement In Today's Mortgage Rates 7-28-2017

By James Brooks

The bond market is currently up 6/32 (2.29%), which should improve Raleigh area mortgage rates slightly.

The first of this morning?s three economic releases was the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. The GDP is the total sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. It showed that the economy grew at a 2.6% annual rate during the April through June months. This was a jump from the first quarter?s revised 1.2% rate, but analysts were expecting to see a 2.8% rate of growth. This means that while the economy was stronger than it was during the 1st quarter, it still fell short of expectations. Also, a secondary reading that tracks inflation during the quarter came in much softer than forecasts (up 1.0% vs 1.8%). These readings were good news for bonds and mortgage rates and helped to erase pre-market losses from overnight trading.

Also posted early this morning was the 2nd Quarter Employment Cost Index (ECI) that tracks employer costs for wages and benefits. It rose 0.5% when analysts were expecting to see a 0.6% rise. This data gives us an indication of wage inflation, so the lower the reading the better the news it is for bonds and mortgage rates. Today?s report was slightly favorable for mortgage rates, but is not considered to be highly important to the markets. Therefore, we have seen little impact on today?s mortgage pricing.

The final report of the week was July's University of Michigan Index of Consumer Sentiment at 10:00 AM ET. It came in at 93.4, just a bit higher than the 93.1 from earlier this month. Analysts were expecting to see no change from that preliminary reading, meaning consumer sentiment was slightly stronger than thought this month. Since strengthening confidence usually translates into higher levels of consumer spending, we should consider this news slightly negative for mortgage rates. Fortunately, this is only a moderately important report that showed a slight variance from forecasts.

Next week is pretty busy in terms of relevant economic data scheduled for release. There are reports being posted four of the five days that are expected to have an influence on mortgage pricing. Some of those releases are considered to be highly important to the financial and mortgage markets. There is nothing of relevance set for Monday, so we can expect weekend news and stock movement to have the biggest impact on rates as the week starts.

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... Lock if my closing was taking place over 60 days from now.

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