April 27th, 2018 11:19 AM by T. Fanning
Last Updated: 4/27/18Friday's bond market has opened in positive territory even though this morning's economic data was mostly unfavorable. The major stock indexes are mixed with the Dow down 26 points and the Nasdaq up 23 points. The bond market is currently up 4/32 (2.96%), which should improve this morning's mortgage rates by slightly more than .125 of a discount point.Yesterday's 7-year Treasury Note auction went a little better than Wednesday's 5-year Note sale did. Several benchmarks pointed towards a decent level of interest in the securities. The bond market had little reaction when results were posted though, meaning the sale had no impact on mortgage rates.The first of this morning's three economic reports was the extremely important initial GDP reading for the 1st quarter. It revealed that the economy grew at a 2.3% annual pace during the first three months of the year. This was a faster rate than the 2.1% that analysts had expected, making the data bad news for bonds and mortgage rates. That is because bonds tend to thrive in weaker economic conditions while stocks are more appealing during better economic growth.Also at 8:30 AM was the release of the 1st Quarter Employment Cost Index (ECI). It showed a slightly stronger than predicted 0.8% rise, pointing to higher employer costs for wages and benefits. Because rising wages is a sign of inflationary pressures building, we should consider this report negative for bonds and mortgage rates too. Fortunately, this doesn't draw as much attention as the GDP, so its influence on today's rates has been minimal.Closing out the week's calendar was the University of Michigan's revised Index of Consumer Sentiment for April at 10:00 AM ET. It came in at 98.8, up from the preliminary reading of 97.8 that we got two weeks ago but lower than March's 101.4. That means surveyed consumers felt better about their financial positions in March than they did this month. Since waning confidence usually translates into softer consumer spending levels, the decline is good news. Although, analysts were expecting to see only a 98.0 reading this morning, indicating sentiment was a bit stronger than expected.Next week's calendar is quite busy with a handful of economic reports that has relevant data being released each day. A couple of the reports are considered to be highly important to the financial and mortgage markets. In addition to the economic releases, there is an FOMC meeting taking place mid-week that always is of extremely high interest to the markets. Monday's contribution is March's Personal Income and Outlays report that will give us an indication of consumer ability to spend and current spending habits. This report also includes an inflation-related reading that the Fed relies heavily on during their FOMC meetings. Look for details on all 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...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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