What initially looked to be a good morning for mortgage rates was erased when a regional manufacturing report from the Chicago area came in with surprisingly strong numbers. We don’t usually pay too much attention to regional reports as they often have little influence on national mortgage rates. However, this morning’s surprise spike that indicates much stronger than expected manufacturing growth in that region caused bonds to give back their early morning gains that were likely to improve today’s pricing.
Today’s unemployment update had little impact on the markets. The Labor Department announced early this morning that 340,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week’s total of 350,000 but slightly higher than the 335,000 that was forecasted. That was not enough of a variance to cause much alarm or excitement in the bond market, meaning it had little influence on this morning’s mortgage rates.
Tomorrow does have a key economic report scheduled to be released. It will come from the Institute for Supply Management (ISM), who will post their manufacturing index for October at 10:00 AM ET. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength or weakness. It is considered to be one of the more important reports we see each month, partly because it is the first report every month that tracks the preceding month's activity. Tomorrow's release is expected to show a reading of 55.0, indicating that manufacturer sentiment slipped from September's level of 56.2. This means fewer surveyed business executives felt business improved during the month than in September, hinting at manufacturing sector weakness. A smaller than expected reading would be good news for bonds and mortgage rates, especially if it drops below the benchmark 50.0.
I am still suggesting on locking your interest rate at this point to take advantage of rates before they go any higher.
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