October 27th, 2017 12:43 PM by T. Fanning
Last Updated: 10/27/17Friday's bond market has opened in positive territory despite stronger than expected results in a key piece of economic data. Stocks are mixed with the Dow up only 5 points and the Nasdaq up 101 points. The bond market is currently up 8/32 (2.43%), but selling late yesterday will prevent an improvement in this morning's mortgage rates. There were widespread upward revisions to mortgage rates of approximately .125 of a discount point late yesterday as bond selling intensified. This morning's gains should offset that increase, causing today's rates to be very close to Thursday's early pricing.Yesterday's 7-year Note sale was pretty weak with several benchmarks pointing towards a lackluster interest in the securities. While that is bad news for the broader bond market, it really wasn't the cause of yesterday's late selling. The downward move in bonds (upward move in yields and mortgage rates) started well after the results of the auction were posted.The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) was posted at 8:30 AM ET this morning. It showed that the economy grew at a 3.0% annual pace, noticeably better than the 2.4% that was expected. In addition, a secondary reading that measure inflationary pressures also came in higher than forecasted. Since bonds tend to thrive in weaker economic conditions, this data is unfavorable to the bond market and mortgage rates. Fortunately, traders don't seem to be too concerned about it.Also posted this morning but at 10:00 AM ET was the revised University of Michigan Index of Consumer Sentiment for October. It came in at 100.7, falling a little short of the 101.0 that was expected. The lower reading indicates surveyed consumers were less optimistic about their personal financial situations than previously thought. With weaker sentiment, weaker consumer spending usually follows. That makes the data good news for bonds and mortgage rates, but this was a minor variance in a moderately important report. Therefore, we are not seeing it have much of an influence on mortgage rates.Next week is packed with mortgage-relevant economic data, some of which is considered extremely important to the markets. We also have another FOMC meeting to contend with mid-week. One of those reports does come Monday (Personal Income and Outlays), meaning we may see movement in rates right out of the gate.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...Lock 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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