January 26th, 2018 12:31 PM by T. Fanning
Last Updated: 1/26/18Friday's bond market has opened in negative territory following mixed economic news. Stocks are showing gains with the Dow up 73 points and the Nasdaq up 37 points. The bond market is currently down 6/32 (2.64%), but we still should see an improvement in this morning's mortgage rates of approximately .125 of a discount point over Thursday's morning pricing. There were widespread rate improvements late yesterday as bonds rallied during afternoon trading. If your lender made a downward revision Thursday afternoon, then you may see an increase in today's pricing.Yesterday's 7-year Treasury Note auction went very well with several benchmarks indicating a strong level of interest in the securities. Bonds made a nice move for the better right after results were posted, so we can attribute the auction results to at least part of yesterday's rally.There were two important economic releases posted early this morning. The initial reading to the 4th quarter Gross Domestic Product (GDP) reading showed that the economy grew at an annual rate of 2.6%. That was softer than the 3rd quarter's 3.2% and fell short of the 2.9% that was expected. Because bonds tend to thrive in weaker economic conditions, the slower rate of growth is good news for the bond and mortgage markets.Also posted at 8:30 AM was December's Durable Goods Orders that showed a 2.9% increase in new orders for big-ticket products such as appliances and airplanes. That was stronger than the 0.9% increase that was forecasted. The larger increase is technically bad news for bonds since it points towards a stronger manufacturing sector. However, this data is known to be quite volatile, so the size of the variance is not nearly as relevant as it would be in many other reports. Also, a secondary reading that excludes more costly transportation-related orders such as airplanes, nearly matched expectations. Still, the large headline number requires us to consider the data slightly negative for bonds and mortgage rates.Next week looks to be pretty active also. We get a couple of highly important releases in the monthly ISM manufacturing index and government Employment report along with several moderately important releases. We also have the new year's first FOMC meeting taking place. The week kicks off with the release of December's Personal Income and Outlays report early Monday morning. 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...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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