Rate Lock Advisory

Thursday, January 23th

Thursday’s bond market has opened in negative territory even though this morning’s only relevant economic headline looked to be favorable. Stocks are mixed with the Dow up 113 points and the Nasdaq down 99 points. The bond market is currently down 9/32 (4.64%), which should lead to an increase of approximately .250 of a discount point in this morning’s mortgage rates. If you saw an upward revision late yesterday, you should see a smaller move today.

9/32

Bonds

30 yr - 4.64%

113

Dow

44,269

99

NASDAQ

19,909

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 20-year Treasury Bond auction gave us mixed results about interest in the securities. A couple of the benchmarks we use to gauge investor demand showed a strong interest while others were much less favorable. Bonds had a slight positive reaction after results were posted at 1:00 PM ET, but had weakened long before they were announced. While some lenders may have made an intraday increase in rates, it was due to the midday bond losses and not because of the auction results.

Medium

Negative

Weekly Unemployment Claims (every Thursday)

Today’s only relevant economic news was last week’s unemployment update at 8:30 AM ET. It showed 223,000 new claims for benefits were filed, up from the previous week’s 217,000 initial filings. This was a higher number than expected, meaning we should consider it good news for rates. However, the release indicates the number is skewed by the California wildfires. That state’s claims rose when most others declined. In other words, without the wildfires causing mass damage and loss of business, the national number likely would have been lower.

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

Tomorrow brings us the release of two moderately important economic releases, both coming at 10:00 AM ET. December’s Existing Home Sales report from the National Association of Realtors is expected to reveal a small increase in home resales, hinting at modest strength in the housing sector. Since housing weakness makes broader economic growth less likely, a decline in sales would be preferred by bond traders and mortgage shoppers.

Medium

Unknown

Univ of Mich Consumer Sentiment (Rev)

January's preliminary reading to the University of Michigan's Index of Consumer Sentiment will finish this week's calendar. It helps predict consumer willingness to spend. By theory, if consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future. Stronger consumer spending numbers translate into economic growth that makes stocks more appealing and bonds less attractive to investors. Predictions show little change from December's 73.2. The lower the reading, the better the news for bonds and mortgage rates.

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... Lock 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.