Rate Lock Advisory

Monday, October 21th

Monday’s bond market has opened well in negative territory despite favorable economic data. Stocks are mixed with the Dow down 92 points and the Nasdaq up 8 points. The bond market is currently down 17/32 (4.14%), which should cause an increase of approximately .375 - .500 of a discount point if compared to Friday’s early pricing.

17/32

Bonds

30 yr - 4.14%

92

Dow

43,185

8

NASDAQ

18,498

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Leading Economic Indicators (LEI) from the Conference Board

This week’s economic calendar started late this morning with the release of September’s Leading Economic Indicators report. The Conference Board announced a 0.5% decline in the LEI, meaning they are predicting weaker economic activity over the next three to six months. Since bonds tend to thrive and look more appealing to investors during weaker economic conditions, we can label the report good news. Unfortunately, this report doesn’t carry enough significance in the markets to offset the overnight weakness that carried into this morning’s session.

Medium

Unknown

None

Tomorrow is the only day of the week that doesn’t have any relevant economic reports scheduled for the markets to digest. The remainder of the week has four more monthly reports, in addition to a Treasury auction, a Fed report and an abundance of corporate earnings releases and Fed speeches.

High

Negative

General Bond Trends

Overall, Friday is the best candidate to see a noticeable change in mortgage rates due to the release of Durable Goods Orders data, while tomorrow is likely to be the calmest day. The benchmark 10-year Treasury Note yield tried to break below the 4.00% threshold last week but failed to do so and this morning’s selling has moved it further away. This is troublesome for mortgage shoppers because the inability to fall below that level makes a trend in the upward direction more likely and mortgage rates tend to track bond yields. This week’s trading could help solidify the direction of yields and mortgage rates over the next few weeks. At first look, that appears to be rates moving higher.

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... 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.

E Z Home Search Real Estate Inc.

Realtor MLS
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