Slight Increase In Today's Mortgage Rates 5-24-2017

By James Brooks

The bond market is down 3/32 (2.29%), we should see an increase in today's mortgage rates of approximately .125 of a discount point.

today's only relevant economic date came from the National Association of Realtors at 10:00 AM ET, who announced that home resales fell 2.3% last month. This was a larger decline than forecasts, indicating the housing sector was softer than many had thought. Because a weakening housing sector is a drag on broader economic growth, the data is good news for bonds and mortgage rates. Unfortunately, this is only a moderately important release and traders seem to be more interested in this afternoon?s release of the FOMC minutes.

Those minutes will be posted at 2:00 PM ET, so any reaction will come during mid-afternoon trading. market participants will be looking for how Fed members voted during the last meeting and any comments about inflation or concerns regarding economic growth. The goal is to form opinions about the Fed's next move regarding key short-term interest rates, which is currently expected to happen at one of the upcoming FOMC meetings.

Before we get to the minutes though, we will be watching the results of today?s 5-year Treasury Note auction. The Fed is auctioning 5-year Notes today and 7-year Notes tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. On the other hand, strong sales usually make bonds more attractive to investors, bringing more funds into the bond market. The buying that follows often translates into lower mortgage rates. Results of the today?s sale will be posted at 1:00 PM ET.

Tomorrow?s only release is last week?s unemployment update. This report is expected to show that 238,000 new claims for unemployment benefits were filed last week, up from the previous week?s 232,000. Rising initial claims are a sign of employment sector weakness, so the larger the number of claims, the better the news it is for mortgage rates. Although, because this is only a weekly reading we usually need to see a significant variance from forecasts for it to impact mortgage rates.

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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