Rate Lock Advisory

Monday, November 27th

Monday’s bond market has opened in positive territory, erasing Friday’s late weakness. Stocks are mixed with the Dow down 42 points and the Nasdaq up 2 points. The bond market is currently up 9/32 (4.43%), which should allow this morning’s mortgage rates to be approximately .125 - .250 of a discount point lower than Friday’s early pricing.



30 yr - 4.43%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



New Home Sales

October’s New Home Sales report was posted at 10:00 AM ET this morning. The Commerce Department announced a 5.6% decline in sales of newly constructed homes, showing further weakness in the housing sector. Last week’s Existing Home Sales report showed a larger than expected decline also. Also worth noting is a sizable downward revision to September’s sales that means the sector was weaker than thought that month also. As a sign of slowing economic activity, we can label the data favorable for mortgage rates.



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

We also have a 5-year Treasury Note auction taking place today. This type of sale does not directly impact mortgage pricing, but it can influence general bond market sentiment. If goes poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. However, strong investor demand usually makes bonds more attractive to investors, translating into slightly lower mortgage rates. Any reaction will come shortly after results are posted at 1:00 PM ET. This scenario will be repeated tomorrow with the 7-year Note auction.




The rest of the week brings us four more monthly and quarterly economic reports for the markets to digest, along with the Treasury auctions and the Fed Beige Book release. There is at least one release or other event scheduled each day with the more influential reports coming as the week progresses.



Consumer Confidence Index

November's Consumer Confidence Index (CCI) will be posted late tomorrow morning. This Conference Board index helps us track consumer confidence in their own financial and employment situations. It is thought that they are more apt to make larger purchases in the near future, fueling economic growth when confidence is high. This is important because consumer spending makes up over two-thirds of the U.S. economy and strength in it makes long-term securities such as mortgage-related bonds less attractive to investors. Traders are expecting to see the index slip a couple points from October's 102.6 meaning surveyed consumers were less optimistic about their own financial situations this month than they were last month. The lower the reading, the better the news for mortgage rates.




Overall, Thursday or Friday look to be the most important day for mortgage rates. Both have reports scheduled that are considered more important than the others. No day stands out as a good candidate for the calmest day. We can expect to see a fairly active week for mortgage rates. Therefore, it would be prudent to watch the markets closely 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... 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.