Rate Lock Advisory

Friday, December 27th

Friday’s bond market has opened relatively flat with little to drive trading this morning other than heavy stock selling. The major stock indexes are showing sizable losses during early trading, pushing the Dow lower by 350 points and the Nasdaq down 431 points. The bond market is currently down 1/32 (4.58%), but solid gains late yesterday are going to allow an improvement in this morning’s mortgage rates of approximately .250 of a discount point. If you saw an intraday downward revision late yesterday, you may see little or no change this morning.

1/32

Bonds

30 yr - 4.58%

350

Dow

42,970

431

NASDAQ

19,589

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

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

Yesterday’s 7-year Treasury Note auction went very well in terms of demand for the securities. The benchmarks pointed to a high demand from investors. The overly strong auction fueled a nice rebound in bonds after results were announced at 1:00 PM. There was enough of a move in bonds that a good number of lenders revised rates lower before closing.

Low

Unknown

None

There is nothing of importance scheduled for release today. We should see a fairly calm day for rates even if there is some movement in bonds. Many bond firms are working with a short staff today, causing thin trading volume. That scenario often translates into stronger moves than we would normally see on a traditional trading day. If some weakness appears in bonds today, it isn’t necessarily a concern in the longer-term outlook for rates.

High

Unknown

ISM Index (Institute for Supply Management)

Next week will also be shortened, this time due to the New Year’s Day holiday. We will get just one of the usual new month batch of economic reports and it doesn’t come until Friday morning (ISM manufacturing index). The ADP and governmental Employment reports will be released the following week. There is actually very little scheduled next week that is expected to influence mortgage rates other than the ISM report. Look for details on all of next week’s schedule in Sunday evening’s weekly preview.

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.