By James Brooks

The bond market is down1/32 (2.25%), which should keep Raleigh area mortgage rates at yesterday’s levels.

July's Housing Starts was posted at 8:30 AM ET this morning, revealing a 4.8% decline in new home groundbreakings. That was much weaker than forecasts, hinting at weakness in the new home portion of the housing sector. Even a secondary reading that tracks new construction permits that helps us measure future starts came in much lighter than expectations. Those readings make the data good news for bonds and mortgage rates. Unfortunately, this report doesn’t carry a high level of importance, meaning it has had a limited impact on today's rates.

We also have the minutes from the last FOMC meeting to watch for later today. There is a pretty good possibility of the markets reacting to them following their release. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy, economic growth and the Fed's plans for raising short-term interest rates or reducing their balance sheet. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during mid-afternoon trading. This is one of those events that can cause significant movement in rates after its release or be a non-factor. Therefore, be prepared for a move, but not surprised if the impact on rates is minimal.

Tomorrow has three pieces of economic data that may affect mortgage rates, but none of them are considered to be highly important. The first will come at 8:30 AM ET when last week’s unemployment figures are released. They are expected to show that 240,000 new claims for unemployment benefits were filed last week, down from the previous week’s 244,000 initial claims. Since rising claims hints at employment sector weakness, the higher the number the better the news it is for mortgage rates. However, because this is only a weekly report, it likely will have little influence on tomorrow’s mortgage rates unless it shows a significant variance.

The second will be July's Industrial Production report at 9:15 AM ET that measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.3% increase from June's level. A decline would be considered favorable news for bonds and mortgage rates because it would indicate manufacturing sector weakness and broader economic growth would be more difficult if manufacturing activity is slipping.

The final report of the day will come from the Conference Board, who is a New York-based business research group. They will post their Leading Economic Indicators (LEI) for July at 10:00 AM ET tomorrow morning. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases economic growth concerns in the bond market and could lead to slightly lower mortgage rates. It is expected to show an increase of 0.3% in the index, pointing towards moderate economic growth over the next couple of months. It will take a sizable difference between forecasts and its actual reading for this report to noticeably influence mortgage rates.

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