Rate Lock Advisory

Wednesday, October 23th

Wednesday’s bond market has opened in positive territory despite little news to drive trading. The major stock indexes are mixed with the Dow up 37 points and the Nasdaq down 8 points. The bond market is currently up 8/32 (1.74%), which should improve this morning’s mortgage rates slightly.

8/32


Bonds


30 yr - 1.74%

37


Dow


26,825

8


NASDAQ


8,096

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


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

There is no relevant economic data being released today. The only mortgage rate sensitive event is the 5-year Treasury Note auction that is taking place. Results will be posted at 1:00 PM ET. If it is met with a strong demand from investors, bond prices may rise during afternoon trading. This could lead to a slight improvement in mortgage rates later today. On the other hand, a weak interest in the securities could cause an upward revision to rates. This process will be repeated tomorrow also when 7-year Notes are sold.

High


Unknown


Durable Goods Orders

Tomorrow morning has two monthly economic reports for the markets to digest with one being much more important than the other. The major release is Durable Goods Orders for September at 8:30 AM ET. It gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for a 1.1% decline in new orders for products such as airplanes, appliances and electronics. If we see a large increase in orders, mortgage rates will probably rise as bond prices fall. However, a larger decline should be good news for the bond market and mortgage rates. This data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance in orders either way likely will have little effect on tomorrow’s bond trading and mortgage pricing.

Low


Unknown


New Home Sales

September's New Home Sales is the day’s second release, scheduled for 10:00 AM ET. This Commerce Department report covers the small percentage of home sales that yesterday's Existing Home Sales report didn't include. It is expected to show a small decline in sales of newly constructed homes, but I don't see this report having much of an impact on mortgage rates unless it shows a significant variance from forecasts.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.


English French German Portuguese Spanish