Slight Increase In Today's Mortgage Rates 11-30-2017
By James Brooks
The bond market is down 6/32 (2.42%), which should increase Raleigh area mortgage rates by .125 of a discount point.
Yesterday afternoon?s release of the Fed Beige Book didn?t reveal many surprises. It indicated modest to moderate economic growth throughout the Fed?s 12 regions. What did draw some attention were notes of price pressures rising since the previous update. Inflation has been subdued with the Fed repeatedly predicting it will eventually get to its preferred threshold of 2.0% annually. Rising inflation makes long-term securities such as mortgage-related bonds less attractive to investors and causes mortgage rates to rise instead of falling. Yesterday?s news didn?t have much of an influence on mortgage rates, but it does put us on alert for the next update.
There were two economic reports posted this morning, both at 8:30 AM ET. The Commerce Department gave us October's Personal Income and Outlays data that showed a 0.4% rise in income while spending rose 0.3%. Analysts were expecting to see a 0.3% increase in both, meaning the income reading that give consumers the ability to spend, was stronger than thought. That makes the report neutral to slightly negative for mortgage rates, especially since the inflation readings pegged forecasts.
Last week?s unemployment update was also released. It revealed that 238,000 new claims for unemployment benefits were filed last week. That was down slightly from the previous week?s revised 240,000 initial filings, but matched expectations. Because this is only a weekly snapshot of the employment sector and did not reveal a significant variance, it has also had little impact on today's mortgage pricing.
The week?s calendar closes tomorrow with an important manufacturing report. November's Institute for Supply Management?s (ISM) manufacturing index will be posted at 10:00 AM ET tomorrow. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October's reading was previously announced as 58.7. A weaker reading than the expected 58.3 would be good news for the bond market and mortgage rates, especially if it moves much closer to 50.0. A reading below that threshold means that more surveyed business executives felt business worsened during the month than those who felt it had improved. The lower the reading the better the news it is for bonds because waning sentiment indicates a slowing manufacturing sector and makes broader economic growth less likely.
We will also get weekly unemployment claims early tomorrow morning. They are expected to show that 238,000 new claims for unemployment benefits were filed last week. That would be a slight decline from the previous week. Good news will be a large increase as rising claims is a sign of employment sector weakness.
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.