Rate Lock Advisory

Tuesday, January 28th

Tuesday’s bond market has opened in negative territory following mixed economic news and a partial rebound in stocks. The major stock indexes are showing strong gains during early trading, pushing the Dow higher by 179 points and the Nasdaq up 94 points. The bond market is currently down 9/32 (1.64%), which should cause this morning’s mortgage rates to be slightly higher than yesterday’s morning pricing.



30 yr - 1.64%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 5-year Treasury Note auction was uneventful. The benchmarks showed an average level of interest in the securities and the bond market had little reaction to the results. Accordingly, it is safe to expect the same type of results and reaction from today’s 7-year Note auction. Results will be posted at 1:00 PM ET today. If they show an overly strong demand from investors, we could see a slight positive reaction in bonds and mortgage pricing later today.



Durable Goods Orders

December's Durable Goods Orders data was released at 8:30 AM ET this morning, revealing a stronger than expected 2.4% rise in new orders for big-ticket products. While the headline number is bad news for bonds and rates, there are several other factors that make the data favorable. This data is known to be volatile from month to month, so the size of the variance from forecasts isn’t nearly as relevant as it would be in other reports. More importantly though, a secondary reading that excludes more costly and volatile transportation-related orders, such as new airplanes, came in weaker than expected. Another reading that focuses on business spending (instead of military and government) showed a 0.9% decline. The details within the report allow us to consider it good news for bonds and mortgage pricing.



Consumer Confidence Index (Conference Board)

January's Consumer Confidence Index (CCI) was also posted this morning. The Conference Board announced a reading of 131.6 that exceeded expectations and was an increase from December’s revised 128.2. The stronger reading is bad news for bonds and mortgage rates because higher levels of consumer confidence usually translates into stronger consumer spending that fuels economic growth. If consumers are feeling better about their own financial and employment situations, they are more apt to make a large purchase in the near future.



Federal Open Market Committee (FOMC) Statement

Tomorrow does not have any relevant economic data scheduled, but we will get the results of this year’s first FOMC meeting at 2:00 PM ET. There is a wide consensus that Fed Chair Powell and friends will not make a change to key short-term interest rates this week. It is more likely that the post-meeting statement will be the cause of any afternoon volatility. It is worth noting that every FOMC meeting is now followed by a press conference with Chairman Powell. Traders will be looking for hints as to when the next rate move is likely to come and if the Fed plans on making changes to their balance sheet program. It will be an afternoon event that could have a big impact on the financial and mortgage markets if there are any surprises.

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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