Rate Lock Advisory

Thursday, December 13th

Thursday’s bond market has opened flat despite early gains in stocks and no major economic news. The Dow is currently up 158 points while the Nasdaq is up 32 points. The bond market is currently up 1/32 (2.91%), which should keep improve this morning’s mortgage rates slightly if comparing to Wednesday’s early levels.



30 yr - 2.91%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 10-year Treasury Note auction didn’t go as well as we had hoped. The benchmarks we use to gauge investor demand showed an average level of interest in the securities. Bonds and mortgage rates had little reaction to the news, but yesterday’s results make it hard to be too optimistic about today’s 30-year Bond sale. If today’s auction draws a stronger demand, we could see a slight improvement in mortgage pricing this afternoon. Results will be posted at 1:00 PM ET, so if there is a reaction to the sale, it will come during early afternoon trading.



Weekly Unemployment Claims (every Thursday)

Last week’s unemployment update was today’s only relevant economic data. It revealed that 206,000 new claims for unemployment benefits were filed last week, down from the previous week’s 233,000 initial filings. This is technically bad news for bonds because declining claims is a sign that the employment sector is strengthening. Fortunately, because this is only a weekly snapshot, it has had little impact on today’s trading or mortgage pricing.



Retail Sales

Tomorrow has two pieces of economic data scheduled for release. The first is November’s Retail Sales report at 8:30 AM that will give us some very important insight into consumer spending. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher. Current forecasts are calling for an increase of 0.2% in November's sales.



Industrial Production and Capacity Utilization

The week's calendar closes with November's Industrial Production report at 9:15 Am ET. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are calling for a 0.3% rise in output, indicating modest manufacturing sector strength. A decline would be good news for bonds, while a stronger reading would show manufacturing strength and be considered bad news for 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... 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.