Thursday, September 22, 2016 - Article by: James Brooks - Polaris Home Funding Corp -
By James Brooks
The bond market is up 8/32 (1.63%), which should improve today's mortgage rates by .125 of a discount point.
The first of today's three pieces of economic data was last week's unemployment figures. They showed that 252,000 new claims for unemployment benefits were filed last week, down from the previous week's 260,000 initial filings. Analysts were expecting to see a small increase, not a decline. The lower number indicates that the employment sector strengthened last week instead of slightly weakening. That makes the data bad news for bonds and mortgage rates. Fortunately, this is only a weekly snapshot of the sector and does not carry too much importance.
August's Existing Home Sales report was posted at 10:00 AM ET. The National Association of Realtors announced that home resales fell 0.9% last month, indicating softness in the housing sector. Forecasts were calling for a rise in sales. The decline is good news for the bond and mortgage markets because a weakening housing sector makes broader economic growth more difficult.
The final report of the week was August's Leading Economic Indicators (LEI) from the Conference Board at 10:00 AM ET. They announced a 0.2% drop, meaning the indicators are pointing towards slower economic activity over the next several months. That is also good news for mortgage rates, but it comes from a report that is not considered to be of high importance. Therefore, while favorable for bonds, it actually has not had much of an impact on today's trading.
With nothing of importance set for release tomorrow, I would not be surprised to see a relatively quiet day for mortgage rates. Some movement in bonds and stocks can be expected as traders close out positions they may have taken prior to the FOMC events. But unless something unexpected happens, I don't believe we will see a noticeable move in mortgage pricing.
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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