Slight Movement In Mortgage Rates 11-9-2018

By James Brooks

The bond market is up 12/32 (3.19%), which should improve Raleigh Area mortgage rates by approximately .125 of a discount point.

October's Producer Price Index (PPI) was released at 8:30 AM ET this morning, revealing a 0.6% jump in the overall reading and a 0.5% in the core data. Both
readings were well above expectations of 0.2%, indicating inflationary pressures at the manufacturing level of the economy were much stronger than many had thought. That makes the data bad news for bonds and mortgage rates. Fortunately, traders are not relying solely on this data this morning or we could have seen a noticeable sell-off in bonds.

Also posted this morning but at 10:00 AM Et was November's preliminary reading of the University of Michigan's Index of Consumer Sentiment. They announced a reading of 98.3 that fell in the middle of October’s final reading of 98.6 and what analysts were expecting (98.0). The decline is good news because it means surveyed consumers were less optimistic about their own financial situations this month than they were last month. On the other hand, because analysts were expecting a softer reading, we consider the data neutral towards mortgage rates.

Next week has a couple of important economic reports that are likely to affect mortgage rates. It will be a holiday-shortened week with the bond market closed 

Monday for Veteran’s Day. The stock markets will be open for trading Monday, but mortgage lenders will likely use this afternoon’s rates or will decline rate
locks until Tuesday morning. The rest of the week has a couple of important releases and a large number of Fed member speaking engagements, including one from Fed Chair Powell. 

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days...Float 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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