Surprise Improvement In Today's Mortgage Rates 2-5-2018

By James Brooks

The bond market is up 6/32 (2.74%), which should improve Raleigh area rates by .125 of a discount point.

There is nothing of importance being released today that is expected to affect mortgage rates. In fact, the week has no important monthly or quarterly economic reports set for release. It is a very light week in terms of events scheduled that are likely to influence mortgage rates, with exception to a couple of Treasury auctions taking place mid-week that often do affect rates.

The first scheduled event will be Wednesday afternoon?s 10-year Treasury Note auction. It will be followed by 30-year Bonds Thursday. Wednesday's auction is the more important of the two as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward afternoon revisions to mortgage rates.

Overall, Wednesday is the best candidate on paper for most active day for rates but we are seeing stock action today that is worth watching. Any day could be the calmest, although I suspect the quietest day will come later in the week. Look for stocks to be in focus this week. Of particular interest will be the Dow's ability to stay above 25,000, which is more of a psychological threshold than a technical resistance point. Despite a light calendar, we still may see another active week for the markets and mortgage rates. Therefore, it is prudent to maintain contact with your mortgage professional if floating an interest rate and closing in the near future.

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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