Rate Lock Advisory

Thursday, September 29th

Thursday’s bond market has opened well in negative territory as this week’s rollercoaster ride continues. Stocks are showing significant losses with the Dow down 597 points and the Nasdaq down 361 points. The bond market is currently down 14/32 (3.79%), which should erase most of yesterday’s intraday rally. Most, if not all lenders revised rates lower at least once before closing yesterday. This morning’s losses will reverse that rally, leaving mortgage rates close to Wednesday’s early pricing. How much of an increase you may see today depends on how much of a change you saw late yesterday.



30 yr - 3.79%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



GDP Rev 2 (month after Rev 1)

This morning’s revised GDP release for the second quarter reaffirmed the economy contracted at a 0.6% annual rate during the April through June months. This matched forecasts and the previous estimate that was posted last month. Since this release didn’t’ show a major surprise and it is aged now, it had no impact on this morning’s bond trading or mortgage pricing.



Weekly Unemployment Claims (every Thursday)

Also posted early this morning was last week’s unemployment figures that revealed 193,000 new claims for benefits were made. That number was lower than expected and a decline from the previous week’s revised 209,000 initial filings. Declining claims is a sign of employment sector strength, meaning the data is bad news for rates. However, bonds were already showing sizable losses before this morning’s data was released.



Personal Income and Outlays

Tomorrow has two reports scheduled that may affect rates, starting with August's Personal Income and Outlays at 8:30 AM ET. It gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up such a large part of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. That is negative news for mortgage rates because bonds tend to thrive in weaker economic conditions. Forecasts are calling for a 0.3% rise in income and a 0.2% rise in spending. This report also includes the PCE index that the Fed primarily uses for gauging inflation. A surprise in it can also lead to a move in mortgage pricing. If we see weaker than expected readings, the bond market should react positively, leading to lower mortgage rates tomorrow.



Univ of Mich Consumer Sentiment (Rev)

Closing out this week’s calendar will be the University of Michigan's revised Index of Consumer Sentiment for September at 10:00 AM ET. The preliminary reading that was released earlier this month showed a 59.5 reading. Analysts are expecting to see no change, meaning consumer confidence was as strong as previously thought. Waning confidence is good news for bonds because consumers that are concerned about their own financial and employment situations are less likely to make a large purchase in the near future, limiting economic growth. Therefore, a lower than expected reading would be favorable 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... 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.