Rate Lock Advisory

Monday, December 1st

Monday’s bond market has opened well in negative territory despite favorable manufacturing news. It appears bonds are simply following suit of other global securities during overnight trading, extending those losses into this morning’s session. Stocks are also showing early weakness with the Dow down 197 points and the Nasdaq down 102 points. The bond market is currently down 17/32 (4.07%), which should push this morning’s mortgage rates higher than Friday’s early pricing by approximately .250 of a discount point.

17/32

Bonds

30 yr - 4.07%

197

Dow

47,518

102

NASDAQ

23,263

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Positive

ISM Index (Institute for Supply Management)

This week’s calendar kicked-off with the release of November’s manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. They announced a reading of 48.2 that was a decline from October’s 48.7 and lower than expectations. This means surveyed manufacturing sector executives felt business conditions were better in October than last month. Also noteworthy is the fact that this was the ninth consecutive month the reading has been below the important threshold of 50.0. A reading below that level is considered to be a recessionary sign in the sector. Therefore, we can label the data favorable for bonds and mortgage rates. Unfortunately, the overnight selling momentum took control of this morning’s trading instead of this report that usually has a strong influence on the bond market.

Medium

Unknown

None

The remainder of this week has five more monthly economic reports that have the potential to affect mortgage rates, including one that is highly important but delayed by the shutdown. Tomorrow doesn’t have any relevant economic data set for release. However, Wednesday and Friday both have multiple reports scheduled that could cause a noticeable change in mortgage rates. Most of this week’s data is being released by non-governmental organizations or agencies that weren’t impacted by the shutdown, so those reports will be current news for the markets to digest.

High

Unknown

Inflation News

Overall, Friday is the most important day of the week because of the influence the PCE indexes carry with the Fed even though they date back to September. The calmest day for rates may be tomorrow. We are expecting mortgage rates to make noticeable changes more than once this week, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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.