Rate Lock Advisory

Thursday, July 18th

Thursday’s bond market has opened in negative territory despite mixed economic headlines. Stocks are showing early gains of 131 points in the Dow and 55 points in the Nasdaq. The bond market is currently down 3/32 (4.16%), but strength late yesterday should still allow this morning’s rates to be approximately .125 of a discount point lower than Wednesday’s early pricing.



30 yr - 4.16%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 20-year Treasury Bond auction went relatively well. The benchmarks indicated an above-average demand for the securities compared to other recent sales. Bonds had already improved before the results were announced at 1:00 PM ET, but the news seemed to boost them a little further. This was the time that some lenders started issuing an intraday improvement to rates. The downward revision wasn’t necessary only due to the auction. It looks as if lenders were looking for an opportunity to revise rates lower and it came in the sale results.



Fed Beige Book

Also released late yesterday was the Federal Reserve's Beige Book. It showed that five of the Fed’s twelve districts reported flat or slowing economic activity. This was up from three districts in the previous version of the report. Another favorable note was signs of inflation cooling and concerns about economic conditions over the next six months. In short, the report didn’t reveal any major surprises, but most of what it said was good news for bonds and mortgage rates.



Weekly Unemployment Claims (every Thursday)

The first of this morning’s two economic reports was last week’s unemployment update at 8:30 AM ET. The weekly snapshot showed more people initiated new claims for benefits than did the previous week, hinting at employment sector weakness. Last week’s 243,000 initial filings were a sizable increase from the revised 223,000 the week before and was well above predictions of 227,000.



Leading Economic Indicators (LEI) from the Conference Board

This week’s last relevant economic report was June's Leading Economic Indicators (LEI) at 10:00 AM ET. The Conference Board announced a 0.2% decline in the indicators, meaning they are predicting modestly slower economic activity over the next few months. Forecasts had the decline at 0.3% though, making the data slightly negative news for bonds and mortgage rates.



Corporate Earnings

Tomorrow doesn’t have anything of importance scheduled, except for a couple of Fed-member speeches and some earnings releases. Unless there is a big surprise in one of the speeches or a big move in stocks as a result of the earnings headlines, we should see mortgage rates remain fairly calm.

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.