Slight Inprovement In Mortgage Rates 3-26-2018
By James Brooks
The bond market is down 1/32 (2.85%),but we still should see a slight improvement to Raleigh Area mortgage rates by approximately .125 of a discount point.
There is nothing of relevance scheduled for release today. The rest of the holiday-shortened week brings us the release of four economic reports that have the potential to move mortgage rates in addition to a couple of Treasury auctions. None of this week?s events are considered to be highly important to the markets though.
Tomorrow has the first report worth watching with March's Consumer Confidence Index (CCI) from the New York-based Conference Board at 10:00 AM ET. This index gives us an indication of consumers' willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy. If this report shows that consumer confidence in their own financial situation is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise, pushing mortgage rates higher. It is expected to show a reading of 130.4 down from February's 130.8 reading. The lower the reading, the better the news it is for bonds and mortgage rates.
The first of this week?s two relevant Treasury auctions also takes place tomorrow when 5-year Notes will be sold. That will be followed by 7-year Notes Wednesday. 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. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.
The bond market is expected to close early Thursday ahead of the Good Friday holiday. The stock and bond markets will be closed all day Friday and will reopen for regular trading Monday. It is common to see some pressure in bonds as investors make moves to protect themselves over the long holiday, so don't be surprised if bonds weaken slightly early Thursday afternoon before closing.
Overall, Thursday is likely to be the most active day for mortgage rates with two of the week?s most important reports being posted and pre-holiday portfolio adjustments to be concerned about. The least active day could be any other day. There isn?t much to be worried about this week in terms of events that may alter mortgage rates, but it still would be prudent to keep an eye on the markets if still floating an interest rate as things can change quickly.
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.