Rate Lock Advisory

Friday, January 17th

Friday’s bond market has opened in positive territory despite early stock gains and unfavorable economic news. The major stock indexes are starting the day with sizable gains, pushing the Dow up 315 points and the Nasdaq up 262 points. The bond market is currently up 4/32 (4.59%). This morning’s open, along with gains late yesterday, should improve this morning’s mortgage rates by approximately .250 - .375 of a discount point. If you saw an intraday improvement in pricing Thursday afternoon, you will likely see a smaller change this morning.

4/32

Bonds

30 yr - 4.59%

315

Dow

43,468

262

NASDAQ

19,600

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Negative

Housing Starts (New Home Construction)

December's Housing Starts was the first of this morning’s two economic reports. The 8:30 AM ET release showed new home groundbreakings spiked 15.8% last month, exceeding expectations. However, the large increase is being attributed to multi-family starts (apartments). Single-family home data is usually more relevant to mortgage rates, which rose a much more modest 3.3%. This is partly why this report often has little impact on mortgage rates, like we are seeing this morning.

Medium

Negative

Industrial Production

Next up was December's Industrial Production report at 9:15 AM ET that revealed a surprisingly strong 0.9% rise in output at U.S. factories, mines and utilities. Forecasts were calling for a much smaller increase, signaling strength in part of the manufacturing sector. Accordingly, we must label the data to be bad news for mortgage rates. Fortunately, this report isn’t considered to be highly important to the markets.

Low

Unknown

Holiday Schedule

Next week doesn’t have any significantly important economic data like the past two weeks did. There are a few moderately relevant reports scheduled along with a Treasury auction midweek. The stock and bond markets will be closed Monday for the Martin Luther King Jr holiday, reopening for regular trading Tuesday morning. There isn’t anything that is expected to affect mortgage pricing until Wednesday morning. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.