Monday, August 10, 2015 - Article by: James Brooks - Polaris Home Funding Corp -
By James Brooks
The bond market is down 16/32 (2.22%), which should push today's mortgage rates higher by approximately .125 of a discount point. Strength late Friday is preventing more of an increase in today's pricing.
There is nothing of relevance scheduled for release today, so we are seeing a noticeable reaction to today's stock gains. The rest of the week brings us the release of five pieces of monthly economic data in addition to two Treasury auctions that have the potential to affect mortgage rates. Some of the data is considered to be highly important, meaning we could see decent sized changes to mortgage rates multiple days if the data shows surprises.
Employee Productivity and Costs data for the second quarter will be released at 8:30 AM ET tomorrow morning. It will give us an indication of employee output per hour. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage rates either, but it may influence rates slightly during morning trading. Analysts have predicted a 1.4% rise in productivity during the second quarter and a 0.1% decline in labor costs. A sizable increase in productivity and a larger than expected drop in costs could help improve bonds, contributing to lower mortgage rates.
Overall, Friday is the best candidate to be labeled most important day with a majority of the week's economic data scheduled (3 reports), but we could see noticeable movement in rates Thursday since it has the single most important release in Retail Sales. Wednesday afternoon could be active also due to the 10-year Note auction. I strongly recommend maintaining contact with your mortgage professional this week if still 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... 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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