Rate Lock Advisory

Tuesday, November 30th

Tuesday’s bond market has opened sharply higher due to renewed COVID concerns. Stocks are mixed with the Dow down 189 points and the Nasdaq up 39 points. The bond market is currently up 20/32 (1.43%), which with strength throughout the day, should improve this morning’s mortgage rates by approximately .375 - .500 of a discount point if compared to Monday’s early pricing. Many lenders revised rates lower yesterday afternoon, so the difference in this morning’s rates depends on the size of the intraday improvement you saw yesterday.



30 yr - 1.43%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



COVID-19 Matters

This morning’s bond rally is mostly being fueled by Moderna’s CEO sounding the alarm last night about the low effectiveness current vaccines are likely to have against the new Omicron COVID variant. First was speculation from scientists in Africa last week, based on limited research. Now, the CEO of one of the primary pharmaceutical companies on the front line in the battle of COVID is stating the same. This has revived last Friday’s panic selling in stocks and buying of bonds as a safe-haven.



Fed Talk

Fed Chairman Powell is speaking before the Senate Banking Committee this morning as part of the Coronavirus Aid Act. His prepared testimony was released last night, allowing the markets to trade on them before he actually appears. His comments are a mixed bag for bonds. He specifically states the new strain of COVID is a concern and likely to negatively affect the economy (good news for rates). However, he also stated that inflation rising further and more supply chain issues are a real possibility (bad news for rates). It is too soon to say for sure, but some analysts are changing their predictions on how quickly the Fed will accelerate the tapering of their monthly bond purchases. Delaying the tapering process, assuming things progress that way, is actually good news for bonds and mortgage pricing.



Consumer Confidence Index

Today’s only relevant economic data was November's Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board, who is a New York-based business research group and not a government agency, announced a reading of 109.5 that was lower than expected. A downward revision to October’s reading keeps the monthly change in line with expectations. The lower reading means surveyed consumers did not feel as good about their personal financial situations and are less likely to spend money. This allows us to consider the report slightly favorable for rates.



ADP Employment

Tomorrow has several events scheduled that we will be watching, beginning with the release of November's ADP Employment report at 8:15 AM ET. This report tracks changes in private-sector jobs using the company's payroll processing clients as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. The markets are expecting to see 520,000 new private-sector payrolls last month. A weaker number would be good news for mortgage rates.



ISM Index (Institute for Supply Management)

Next up is November's Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET tomorrow. This highly important index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a rise from October’s reading, which was announced as 60.8. A weaker reading than the expected 61.0 would be good news for the bond market and mortgage rates. The lower the reading the better the news it is for bonds because waning sentiment indicates a slowing manufacturing sector and makes broader economic growth less likely.



FOMC Meeting Minutes

The Federal Reserve's Beige Book will be released at 2:00 PM ET tomorrow. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region through business contacts. Since the Fed uses this info during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

Float / Lock Recommendation

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... 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.