Rate Lock Advisory

Monday, August 25th

Monday’s bond market has opened in negative territory, giving back some of Friday’s unexpected rally. Stocks are mixed with the Dow down 191 points and the Nasdaq up 17 points. The bond market is currently down 8/32 (4.28%), which should cause this morning’s mortgage rates to be slightly higher than Friday’s early pricing. If you saw an intraday improvement in pricing midday Friday, you likely will see that adjustment reversed this morning.

8/32

Bonds

30 yr - 4.28%

191

Dow

45,440

17

NASDAQ

21,513

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Negative

New Home Sales

July's New Home Sales report kicked-off this week’s activities at 10:00 AM ET this morning. It revealed a 0.6% decline in sales of newly constructed homes to hint at slight weakness in the new home portion of the housing sector last month. However, an upward revision in June’s sales is skewing July’s results. The actual number of July’s sales was higher than forecasts. Accordingly, we are labeling the report neutral to slightly negative for mortgage rates. The bond market was already in negative ground before this report was released and showed little reaction after the results were made available.

Medium

Unknown

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

The rest of the week brings us five more monthly and quarterly economic reports that we will be watching. There are also a couple of Treasury auctions that may have an influence on rates during afternoon trading midweek and a few Fed speeches before we get to a piece of key data Friday morning.

Medium

Unknown

Durable Goods Orders

Tomorrow has two relevant economic releases scheduled, starting with July's Durable Goods Orders report at 8:30 AM ET. This report gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years such as appliances, electronics and airplanes. Analysts are expecting to see a large decline of 4.0% in new orders, pointing to softer manufacturing activity last month. This data is known to be quite volatile from month to month, so a decline doesn't necessarily raise too much concern about the economy. However, an unexpected increase will be bad news for the bond market and mortgage rates. A secondary reading that excludes more volatile transportation-related orders is expected to rise 0.1%. Weaker readings would be good news for the bond and mortgage markets.

Medium

Unknown

Consumer Confidence Index

The Conference Board will post their August Consumer Confidence Index (CCI) at 10:00 AM ET tomorrow that gives us an indication of consumer willingness to spend by tracking sentiment about their personal financial and employment situations. If consumers are more confident in their finances, they are more apt to spend money. Since consumer spending makes up over two-thirds of the U.S. economy, this data is watched closely. A noticeable decline in confidence would indicate that surveyed consumers probably will not make a large purchase in the immediate future, making broader economic growth more difficult. The index is expected to come in at 96.5, which would be a decline from July's 97.2. The lower the reading, the better the news for bonds and mortgage pricing.

High

Unknown

Inflation News

Overall, Friday is likely to be the most active day for rates due to the Fed's preferred inflation readings being released PCE indexes). The calmest day may be Wednesday unless the auction results show a terribly weak or overly strong investor demand. It should be a relatively active week for mortgage rates, so please keep an eye on the markets if closing in the near future and still floating an interest rate.

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... Lock 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.

Charity Goode - NMLS 1078755

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