SUNDAY,  Nov 17th, 2024

This week has only four pieces of monthly economic data for the markets to digest, none of which are considered to be highly important. In addition to the data, there is also a Treasury auction, and an abundance of Fed speeches scheduled throughout the week. Tomorrow is the only day of the week without at least one item listed that may affect mortgage rates.

Beginning this week’s economic calendar will be the release of October’s Housing Starts early Tuesday morning. This report shows housing sector strength and future mortgage credit demand by tracking new home groundbreakings. It usually does not have a noticeable impact on mortgage rates, even if there is a moderate variance from forecasts. Analysts are expecting to see fewer starts last month than in September, meaning the new home portion of the housing sector weakened. Favorable news for rates would be a large decline in starts.

Wednesday doesn’t have any relevant economic data scheduled for release but there are a couple of other events we will be watching. We have a decent number of Fed member speaking engagements this week with topics for most of them not too concerning for the bond market or mortgage pricing. That said, Fed member words can become highly influential at any time if they say something that catches market traders off guard. Fed Governor Lisa Cook has one Wednesday morning at 11:00 AM ET in Virginia. The topic of this conversation is Economic Outlook and Monetary Policy, which is a bit more likely to draw a reaction in the markets than many of the other speaking engagements.

Furthermore, there is also a 20-year Treasury Bond auction taking place that may come into play during afternoon hours. If the 1:00 PM ET results announcement indicates there was a strong demand for the securities we may see bond prices rise and mortgage rates improve slightly before the end of the day. On the other hand, a lackluster demand could pressure the bond market and lead to an upward move in rates.

October’s Existing Home Sales report will be posted at 10:00 AM ET Thursday. The National Association of Realtors is expected to announce an increase in home resales, meaning the housing sector improved slightly last month. That would be relatively bad news for the bond market and mortgage pricing because a stronger housing sector makes broader economic growth more likely. But unless it shows a significant surprise, this data will likely not have a major impact on Thursday’s rates.

The Conference Board, who is a New York-based business research group and not a governmental agency, will release their Leading Economic Indicators for October late Thursday morning. These indicators attempt to predict economic activity over the next few months and are considered to be moderately important. Forecasts show a 0.4% decline, meaning the indicators are pointing to weaker economic growth this winter. A larger decline would be considered good news for bonds and mortgage rates.

Concluding the week’s economic releases will be the revised University of Michigan Index of Consumer Sentiment for November at 10:00 AM ET Friday morning. Analysts are expecting to see an increase from the 73.0 preliminary reading two weeks ago, meaning surveyed consumers felt better about their own financial and employment situations than previously thought. Bond traders would prefer to see a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future, restricting economic growth. As long as we don’t see a reading above 73.5, the report will likely have a minimal impact on rates unless it comes in well below the preliminary estimate.

In addition to the data, auction and Fed speeches, we will be watching the benchmark 10-year Treasury Note yield very closely. Last week was the second time since the election that it broke above 4.44% during intraday trading before closing at or below that level. This means there is strong resistance to allowing it to get higher, especially since it has been tested a couple times in a short period of time. A lack of key or highly influential economic data scheduled this week to drive trading could contribute to it moving lower. This would be good news since mortgage rates tend to track bonds yields.

Overall, no day stands out as the most important for mortgage rates. If the bond market doesn’t react to Wednesday’s appearance by Fed Governor Cook, we may see an uneventful week for rates unless something unexpected happens. If still floating an interest rate and closing in the near future, it would still be prudent to keep an eye on the markets- particularly the 10-year Treasury Note yield.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now…

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