Rate Lock Advisory

Wednesday, August 27th

Wednesday’s bond market has opened in negative territory again despite no newsworthy headlines this morning. Stocks are mixed with the Dow up 86 points and the Nasdaq down 18 points. The bond market is currently down 5/32 (4.28%), but another round of afternoon gains should allow this morning’s mortgage rates to be approximately .125 of a discount point lower than Tuesday’s early pricing. If you saw an intraday improvement yesterday afternoon, you could see a slight increase in rates this morning.

5/32

Bonds

30 yr - 4.28%

86

Dow

45,504

18

NASDAQ

21,526

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 (5,7,10,20,30 year)

We don’t have any relevant economic releases to be concerned with today. There is a 5-year Treasury Note auction taking place that may have a minor impact on bond trading and mortgage rates this afternoon. Results of today’s sale will be announced at 1:00 PM ET. Good news for mortgage rates would be a strong demand from investors. If the benchmarks indicate a lackluster interest in the securities, we could see a little pressure in the broader bond market this afternoon, possibly leading to a slight upward revision to mortgage pricing. This scenario will be repeated tomorrow when 7-year Notes are sold.

Medium

Unknown

GDP Rev 1 (month after initial)

Tomorrow morning has two moderately important economic reports set for release, both at 8:30 AM ET. The first revision to the 2nd Quarter Gross Domestic Product (GDP) reading is expected to show the U.S. economy grew at an annual rate of 3.1% during the April through June months. Last month’s initial reading estimated a 3.0% pace, meaning analysts are predicting the economy was a tad stronger than previously thought. We aren’t expecting this report to have a heavy influence on the markets unless it shows a big revision because the data is aged at this point. Traders are now more interested in the current quarter’s data than last quarter.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Also set for release tomorrow morning is last week’s unemployment update that is expected to show 230,000 new claims for jobless benefits were made. This would be a decline from the previous week’s 235,000 initial filings, hinting at strength in the employment sector last week. Good news for mortgage rates will be a larger than predicted number.

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... Lock 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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