October 26th, 2018 9:32 AM by T. Fanning
Last Updated: 10/26/18Friday's bond market has opened in positive territory despite stronger than expected economic news. Stocks are again helping to boost bonds with the Dow down 383 points and the Nasdaq down 185 points. The bond market is currently up 13/32 (3.07%), which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.Yesterday's 7-year Treasury Note auction followed suit of Wednesday's 5-year Note sale. Investor demand was relatively weak just like Wednesday. Fortunately, we didn't see much of a reaction in bonds or mortgage rates once results were posted at 1:00 PMET.Today's big news was the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in at up 3.5%, exceeding forecasts of 3.3%. This means the economy was a bit stronger during the July through September months than many had thought. That headline number is bad news for bonds and mortgage rates. However, a secondary reading that tracks inflationary pressures within the data came in well below forecasts. Bonds were stronger during overnight trading but gave back some of those gains once the data hit the wires. It appears that the stronger GDP reading and weaker inflationary reading offset each other, allowing bond yields to return to early morning levels.Closing out this week's activities was the University of Michigan's revised Index of Consumer Sentiment for October. They announced a reading of 98.6, falling a little short of forecasts. Analysts were expecting to see a reading of 99.0, meaning surveyed consumers didn't feel as good about their own financial situations as they did earlier in the month. That is good news for bonds and mortgage rates because waning confidence usually translates into softer levels of consumer spending that fuels economic growth.Next week is going to be quite busy in terms of scheduled economic releases that are likely to affect mortgage rates. It starts with September's Personal Income and Outlays data Monday morning and concludes with the almighty monthly Employment report Friday. In between, there are a few releases, including the highly important ISM manufacturing index. Look for details on all of next week's calendar in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
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