January 31st, 2020 11:38 AM by T. Fanning
Last Updated: 1/31/20Friday's bond market has opened well in positive territory with stocks showing heavy losses. The Dow is currently down 268 points while the Nasdaq has lost 33 points. The bond market is currently up 15/32 (1.53%), which should improve this morning's mortgage rates by approximately .125 of a discount point. More importantly, this morning's move pushes the benchmark 10-year Treasury Note yield below an important resistance level of 1.55%. If it stays below that level today, we could see further improvements in mortgage rates in the immediate future. That is assuming that next week's key economic data does not derail the rally.The first of today's three economic reports was December's Personal Income and Outlays data at 8:30 AM ET. It revealed that personal income rose 0.2% last month while spending rose 0.3%. The rise in spending matched expectations but the income reading fell a bit short of the 0.3% increase that was forecasted. Also worth noting was a downward revision to November's income reading. Because the smaller than predicted rise in income means consumers had less money to spend than many had thought, we can consider the data slightly favorable for bonds and mortgage rates.Also at 8:30 AM ET was the release of the 4th Quarter Employment Cost Index (ECI) that came in at up 0.7%. The increase indicates employers paid more for wages and benefits during the quarter than the third quarter of last year, but because it pegged forecasts it had little impact on this morning's mortgage pricing.Lastly, the University of Michigan revised their Index of Consumer Sentiment for January at 10:00 AM ET, announcing a reading of 99.8 that was a little stronger than expectations. The higher reading is a sign that consumers felt better about their own financial situations than analysts had expected. Since stronger consumer confidence levels usually translate into higher levels of consumer spending that fuels economic growth, this was bad news for mortgage rates. Fortunately, its only a moderately important report that didn't have much of an influence on this morning's trading.Next week does not have a large number of economic reports scheduled for release that are expected to affect rates but most of what is set is considered to be extremely important. They start late Monday morning with the release of January's ISM manufacturing index that will give us a key reading of conditions in the manufacturing sector of the economy. The week closes with the almighty monthly Employment report. In between are a couple of moderately important events. Look for details on all of next 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...Float 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
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.