Rate Lock Advisory

Tuesday, November 21th

Tuesday’s bond market has opened in positive territory despite stronger than expected results in today’s sole economic release and a strong open for stocks. The Dow is currently up 151 points while the Nasdaq has gained 63 points. The bond market is currently up 5/32 (2.35%), which should keep this morning’s mortgage pricing unchanged from Monday’s morning rates. If your lender revised rates slightly higher yesterday afternoon, you should see an improvement in this morning’s rates of the same size.



30 yr - 2.35%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

October's Existing Home Sales data was posted at 10:00 AM this morning. The National Association of Realtors announced that home resales rose 2.0% last month, exceeding expectations. That means the housing sector was stronger than thought. Because a strengthening housing sector makes broader economic growth more likely, we should consider this data unfavorable for bonds and mortgage rates.



Durable Goods Orders

Tomorrow has two economic reports scheduled for release. The first is October's Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items or products that are expected to last three or more years, such as airplanes, appliances and electronics. This data is known to be quite volatile from month-to-month, so sizable swings from the previous month are fairly normal. It is expected to show a 0.4% rise in new orders. A decline would be considered good news for the bond market and mortgage rates as it would indicate the manufacturing sector was not as strong as thought. We need to see a sizable variance from forecasts though for the markets to have a noticeable reaction due to the usual volatility in the data. It is worth mentioning though that this is the most important report of the week.



University of Michigan Consumer Sentiment (Rev)

The second report of the day will be the revised University of Michigan Index of Consumer Sentiment for November. Current forecasts are calling for a slight increase (97.9 from 97.8), meaning surveyed consumers felt nearly the same about their own financial and employment situations as they did in October. Bond traders would prefer to see a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future, restricting economic growth.



Federal Open Market Committee (FOMC) Minutes

Also worth noting is the release of the minutes from the last FOMC meeting tomorrow afternoon that can have an impact on the financial and mortgage markets. Traders will be looking for any indication of the Fed's next move regarding monetary policy, particularly something that would hint that a rate increase will not come next month as it is widely expected to. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising regarding when the Fed will raise key short-term interest rates again or their balance sheet reduction plan, we will see some movement in rates tomorrow afternoon.

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.