Rate Lock Advisory

Wednesday, October 17th

Wednesday’s bond market has opened in positive territory, mostly a result of early stock selling. The major stock indexes are showing fairly heavy losses again with the Dow down 227 points and the Nasdaq down 45 points. The bond market is currently up 3/32 (3.15%), which should improve this morning’s mortgage rates by a little less than .125 of a discount point.



30 yr - 3.15%







Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock



Housing Starts (New Residential Construction)

The Commerce Department reported early this morning that new home groundbreakings fell 5.3% last month. This was a larger decline than was expected, indicating weakness in the new home portion of the housing sector. That makes the data favorable for bonds and mortgage rates as it is a sign of economic weakness. However, this report does not carry a high level of importance, so it has had a minimal impact on today’s trading.



Federal Open Market Committee (FOMC) Minutes

We also have the release of the minutes from last month’s FOMC meeting to watch this afternoon. These may move the markets or could be a non-factor, depending on what they show. The key points traders are looking for are concerns over economic growth here and globally, inflation and the Fed's next monetary policy move (rate hike). It is worth noting though that the last FOMC meeting was followed by revised economic predictions and a press conference with Fed Chair Powell. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low. The minutes will be released at 2:00 PM ET, meaning of there is a reaction in the markets it will come mid-afternoon.



Weekly Unemployment Claims (every Thursday)

Tomorrow has two minor pieces of economic data set for release. The first will be last week’s unemployment update at 8:30 AM ET. It is expected to show that 212,000 new claims for unemployment benefits were filed last week, down slightly from the previous week’s 214,000. Because rising claims is a sign of a weakening housing sector, the higher the number in this report, the better the news it is for mortgage rates. That said, since this is only a weekly snapshot, it takes a wide variance from forecasts for the data to directly influence mortgage pricing.



Leading Economic Indicators (LEI) from the Conference Board

September's Leading Economic Indicators (LEI) will be released at 10:00 AM ET tomorrow. This Conference Board index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.5% from August's reading. This would indicate that economic activity is likely to grow fairly rapidly over the next couple of months. A small increase would not be of much concern to the bond and mortgage market. A large decline would be favorable for mortgage shoppers.

Float / Lock Recommendation

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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.