Updated on February 16, 2018 10:21:25 AM EST
Januarys Housing Starts was posted at 8:30 AM ET this morning. The Commerce Department announced a 9.7% increase in new home groundbreakings, exceeding forecasts. The larger than expected rise is being attributed to a 34.7% spike in starts in the Northeast alone. Still, the stronger number of new starts makes the data bad news for bonds and mortgage rates because strong economic conditions make bonds less attractive to investors. Fortunately though, this report is not considered to be highly influential, preventing much of an impact on today’s rates.
The second release of the morning was Februarys preliminary reading to the University of Michigans Index of Consumer Sentiment at 10:00 AM ET. It came in at 99.9, also well above forecasts. Analysts had predicted a 95.5 reading that would have been down slightly from January’s 95.7. The higher reading indicates surveyed consumers were felt better about their own financial and employment situations than they did last month. Since rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, this is also bad news for mortgage rates. However, as with the housing data, this report is not considered to be highly important and has had a minimal influence on this morning’s rates. This report will be updated again in two weeks.
Next week is not overly busy in terms of relevant economic data and other events that may affect mortgage rates. The markets are closed Monday for the President’s Day holiday. Some lenders may be open for business but will be using this afternoon’s rates or not issuing new rates until Tuesday morning. The rest of the week has a couple of lower or middle-tier economic releases along with the minutes from last month’s FOMC meeting and two Treasury auctions that have the potential to alter mortgage rates. Look for details on all of next week’s activities in Sunday evening’s weekly preview.
©Mortgage Commentary 2018