Surprise Day for Mortgage Rates 4-30-2018
By James Brooks
The bond market is up 3/32 (2.97%), which with gains late Friday should improve push Raleigh Area mortgage rates to lower by approximately .125 of a discount point.
March's Personal Income and Outlays data kicked off this week?s calendar at 8:30 AM ET this morning. The Commerce Department announced a 0.3% rise in income and a 0.4% increase in spending. The income reading was slightly lighter than forecasts of 0.4%, but the spending reading pegged expectations. Also, the inflation index within the report that the Fed uses showed no surprises. Because the income increase fell short of forecasts, meaning consumers had less money to spend, we can consider the data neutral to slightly favorable for mortgage rates.
The rest of the week brings us the release of five more pieces of economic data that are likely to influence mortgage rates in addition to an FOMC meeting. Tomorrow has one of those scheduled and it is one of the week?s two major releases. April's Institute for Supply Management's (ISM) manufacturing index will be posted at 10:00 AM tomorrow, giving us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. Analysts are expecting to see a reading of 58.6 down from March's 59.3. Bond traders would prefer to see a reading below 50.0 as it would hint at contraction in the manufacturing sector rather than growth, but a larger decline from March's level would still be good news for mortgage shoppers.
Overall, Friday is the biggest day of the week in terms of economic data driven mortgage rates movement with the Employment report being posted, but tomorrow is also likely to be active due to the ISM release. Wednesday afternoon?s FOMC meeting certainly has the potential to heavily affect the markets and mortgage rates, so that day potentially could be highly active also. With something of importance taking place each day, there is a strong possibility of seeing plenty of movement in mortgage rates this week.
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... Float if my closing was taking place over 60 days from now.