Thursday, August 21, 2014 - Article by: James Brooks - Polaris Home Funding Corp -
By James Brooks
The bond market is currently up 5/32 (2.41%),which should improve mortgage rates by .125 points.
The first of this morning's three releases was last week's unemployment figures at 8:30 AM ET. They showed that 298,000 new claims for unemployment benefits were filed last week, down from the previous week's revised total of 312,000. That indicates the employment sector strengthened last week, making the data slightly negative for bonds and mortgage rates.
July's Existing Home Sales report was posted by the National Association of Realtors at 10:00 AM ET this morning. They announced a 2.4% increase in home resales last month, exceeding forecasts of a slight decline in sales. That is a sign that the housing sector was stronger than many had thought, but growth was modest. Because analysts were expecting to see a decline in home sales, we should consider the data negative for bonds and mortgage rates.
Also at 10:00 AM this morning, the Conference Board said their Leading Economic Indicators (LEI) for July rose 0.9%. Forecasts were calling for a 0.7% rise, so this data is also not favorable to mortgage rates. It shows that the indicators are predicting a fairly rapid rate of economic growth over the next several months. Fortunately, none of this morning's news is considered highly important and has had a minimal impact on today's mortgage rates.
Tomorrow has no economic data of importance to mortgage rates scheduled for release. Fed Chair Janet Yellen is expected to speak at the central banker's conference in Jackson Hole, Wyoming. Her words are always watched closely and have the potential to influence the financial and mortgage markets. Therefore, we will be watching for some type of reaction when she speaks at 10:00 AM ET. The European Central Bank President speaks at 2:00 PM ET, so there is a possibility of seeing some afternoon volatility also if he says anything surprising that is of significance.
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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