Today's Mortgage Rates Begin To Rise 9-27-2017

By James Brooks

The bond market is down 18/32 (2.30%), which should push Raleigh area mortgage rates higher by approximately .125 of a discount point.

Today?s only relevant economic report was August's Durable Goods Orders at 8:30 AM ET. The Commerce Department announced that new orders for big-ticket items such as airplanes, appliances and electronics rose 1.7% last month. This was stronger than the 0.7% increase that was expected, indicating strength in the manufacturing sector. However, this data is not what is driving this morning?s bond trading. The variance from forecasts that we saw this morning would be significant in many other releases. Not in this one though. This data is known to be quite volatile from month to month. In fact, a secondary reading that excludes more volatile transportation and airplane orders pegged expectations at up 0.2%.

We also have today?s 5-year Treasury Note auction taking place today that may influence this afternoon?s trading. Results of the sale will be announced at 1:00 PM ET, so any reaction will come during afternoon hours. A strong demand for the securities could help boost bond prices and possibly lead to a slight improvement in mortgage pricing. On the other hand, a lackluster sale may fuel more selling that extends this morning?s losses.

Along with the 7-year Treasury Note sale, tomorrow has two economic reports set for release. The first is the second revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show that the economy grew at an annual rate of 3.0%, unchanged from last month's estimate. The lower the number, the better the news it is for mortgage rates. However, unless there is a significant change in this reading, it likely will not influence mortgage rates.

The second is will be last week?s unemployment update, also at 8:30 AM. This report is expected to show that 275,000 new claims for unemployment benefits were filed last week, up from the previous week?s 259,000. 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 miss 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... Lock 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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