Rate Lock Advisory

Monday, September 16th

Monday’s bond market has opened in positive territory in reaction to the Saudi oil attack. That also has stocks in negative ground, pushing the Dow lower by 114 points and the Nasdaq down 19 points. The bond market is currently up 10/32 (1.86%), but heavy selling Friday afternoon is going to keep this morning’s mortgage rates approximately .125 of a discount point higher than Friday’s early pricing. Many lenders revised rates higher intraday as bond selling accelerated during late trading. How much of a change in rates you will see this morning depends on how much of a revision was made late Friday.

10/32


Bonds


30 yr - 1.86%

114


Dow


27,104

19


NASDAQ


8,157

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


None

There is no relevant economic data scheduled for release today. The rest of the week brings us four reports that could affect mortgage rates, none of which are considered to be key releases. We also have an afternoon filled with Fed FOMC events midweek that will likely cause plenty of volatility. While the data probably will not influence rates heavily, the Fed events could help reverse the negative momentum in bonds and mortgage pricing. Or, possibly cause another leg higher. In other words, despite the lack of key data, it still is going to be a highly important week for the markets.

Medium


Unknown


Industrial Production and Capacity Utilization

August's Industrial Production data will start this week’s activities at 9:15 AM ET tomorrow. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important, meaning it can influence mortgage rates if it shows a noticeable variation from forecasts. A 0.1% rise from July's level of output is what market participants are expecting to see. A larger increase would be negative news for bonds and mortgage rates, while a weaker than expected figure would be considered good news.

High


Positive


Geopolitical/Financial Issues

The weekend attack on the Saudi oil refinery is fueling this morning’s bond gains, but it is worth noting that they are well off of their best levels during overnight trading. Generally speaking, situations of political turmoil and/or war are favorable for bonds and detrimental to stocks. Comments from President Trump have hinted that a military strike may be in the works as a reaction to the attack. Unless there is a major retaliation for the attack, this event will likely not have an extended impact on mortgage rates.

Medium


Unknown


None

Overall, Wednesday is the most important day of the week for rates while Friday is best candidate for calmest day unless something unforeseen happens. The Fed events late Wednesday our best bet for a rally this week in 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... 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.


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