Rate Lock Advisory

Monday, September 25th

Monday’s bond market has opened in negative territory, erasing Friday’s nice rally. Stocks are down a little with the Dow showing a 66-point loss and the Nasdaq nearly unchanged. The bond market is currently down 21/32 (4.51%), which should cause an increase in this morning’s mortgage rates of approximately .250 of a discount point. If you saw an intraday improvement in rates before closing Friday, you may see a larger increase this morning than those who did not get a revision.



30 yr - 4.51%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

Today has nothing of importance scheduled, the only day of the week without at least one item. There were some mixed economic and inflation headlines from overseas, but none of them stand out as a good reason for the overnight selling that extended into this morning’s session. The weakness contradicts expectations for a bond rally going into the government shutdown deadline this Saturday. Such a rally would likely improve mortgage rates noticeably. After Friday’s gains, it looked as if the trend had already started. There still is time for a reversal, although we are a bit less optimistic this morning.




The rest of the week has six monthly and quarterly economic reports that have the potential to affect rates. There are also a couple of Treasury auctions that may come into play during afternoon hours midweek and some Fed speeches that traders will watch.



Consumer Confidence Index

September's Consumer Confidence Index (CCI) will kick-off this week’s activities at 10:00 AM ET tomorrow morning. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a decline in confidence from August's reading, meaning surveyed consumers were not as optimistic about their own financial situations as they were last month. Rising confidence is thought to raise the possibility consumers will make a large purchase in the near future. Because consumer spending makes up almost 70% of the U.S. economy, good news for rates would be a large decline. Analysts are calling for a reading of approximately 105.3, down from August's 106.1. The smaller the reading, the better the news for the bond market and mortgage rates.



New Home Sales

Tomorrow's second piece of data will be August's New Home Sales report. The Commerce Department is expected to say at 10:00 AM ET that sales of newly constructed homes fell last month. This report will likely not have a noticeable impact on mortgage rates unless it differs greatly from forecasts. It is the week's least important report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that last week's Existing Home Sales report did not.




Overall, the most active day for rates may be Friday or today, but Wednesday is expected to have a noticeable move also. No day stands out as a clear candidate for calmest day since there is so much scheduled. We can expect to see an active week for rates, so keep an eye on the markets if still floating an interest rate and closing in the near future.

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.