By James Brooks

The bond market is currently up 6/32 (2.34%), we should a slight improvement in Raleigh area mortgage rates.

Last week’s unemployment update was posted early this morning, revealing that 236,000 new claims for unemployment benefits were field last week. This was a small decline from the previous week’s 238,000 initial filings. Since analysts were expecting to see an increase in claims, we can consider this data bad news for mortgage rates. Fortunately, this is only a weekly snapshot, so its impact on today’s trading has been minimal.

Tomorrow closes the week with two economic reports scheduled, one of which is extremely important to the markets. That key release is November's Employment figures at 8:30 AM ET. This is arguably the most important monthly report we see, so its impact on the markets and mortgage rates is often significant. It is comprised of many statistics and readings, but the most watched are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 4.1% while 190,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.3%. An ideal scenario for mortgage shoppers would be a higher unemployment rate, a much smaller increase in payrolls (or a decline) and no change in the earnings reading. That scenario should cause bond prices to rise sharply and mortgage rates to move much lower tomorrow. However, stronger than expected readings would likely fuel a bond sell-off that would lead to higher mortgage rates.

Also worth noting is that extra attention will be given to this month's Employment report because it is the last one before this month FOMC meeting. It is at this meeting that many analysts and market participants expect the Fed to push key short-term interest rates higher by a quarter-point. If this report meets or exceeds expectations, it is highly likely that the Fed will make that planned move this month. On the other hand, surprisingly weak numbers throw into question whether they will make that rate hike now or wait for the first 2018 meeting to do so. Any possibility of a delay in the rate hike should be taken as good news in the bond market.

The final report of the week is the release of December's preliminary reading to the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET tomorrow morning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. Tomorrow's release is expected to show a reading of 98.8, which would be a small increase from last month's final reading of 98.5. A large decline in confidence would be considered good news for the bond market and mortgage rates.

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.