October 14th, 2016 3:52 PM by T. Fanning
Last Updated: 10/14/16Friday's bond market has opened in negative territory following the release of mixed economic news. The stock markets are showing early strength with the Dow up 149 points and the Nasdaq up 42 points. The bond market is currently down 5/32 (1.76%), but I don't believe that will be enough to move this morning's mortgage rates, keeping them at yesterday's early levels.The first of this morning's three relevant economic releases was September's Retail Sales report at 8:30 AM ET. The Commerce Department announced a 0.6% increase in retail level sales last month. While this is a noticeable increase that points towards stronger economic growth, it actually pegged forecasts. The same can be said about a secondary reading that excludes more volatile and costly auto transactions. If those sales are excluded, there was a 0.5% rise that also matched expectations. Therefore, we are considering the data to be neutral to slightly negative for mortgage rates.Septem ber's Pr oducer Price Index (PPI) was also posted early this morning and as with the sales report, is considered to be highly relevant to the bond and mortgage markets. It showed a 0.3% increase in the overall reading and 0.2% rise in the more important core data that does not included volatile food and energy costs. Analysts were expecting to see increases of 0.2% and 0.1% respectively. This means inflationary pressures at the producer level of the economy were slightly stronger last month than expected, making the data negative for bonds and mortgage pricing.The third report of the day and the final release of the week came just before 10:00 AM ET when the University of Michigan posted their Index of Consumer Sentiment for October. It came in at 87.9, falling well short of the 92.4 that was expected. This means surveyed consumers were not nearly as optimistic about their own financial situations as many had thought. That is favorable news for bonds because waning confidence u sually translates into weaker levels of consumer spending that fuels economic growth.Next week has a handful of reports scheduled that we will be watching, starting with Monday's mid-morning release of September's Industrial Production data. There is only one highly important report in the batch. Look for details on it and the rest of the week's activities 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... 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
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