Rate Lock Advisory

Monday, November 20th

Monday’s bond market has opened down slightly with stocks showing early strength. The major stock indexes are beginning the week with moderate gains, pushing the Dow up 59 points and the Nasdaq up 10 points. The bond market is currently down 3/32 (2.35%), which should keep this morning’s mortgage pricing very close to Friday’s early levels.

3/32


Bonds


30 yr - 2.35%

59


Dow


23,418

10


NASDAQ


6,793

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Negative


Leading Economic Indicators (LEI) from the Conference Board

The holiday-shortened calendar kicked-off with the release of October’s Leading Economic Indicators (LEI) at 10:00 AM ET today. The Conference Board announced an increase of 1.2% in the indicators, meaning they are predicting economic growth over the next several months. That exceeded forecasts of a 0.8% rise, making the data bad news for mortgage rates. Fortunately, this report is not considered to be one of the more important releases we get each month, minimizing its impact on today’s trading.

Medium


Unknown


Existing Home Sales from National Assoc of Realtors

There are three more economic releases scheduled for the markets to digest this week in addition to the minutes from the most recent FOMC meeting. October's Existing Home Sales data is next, coming at 10:00 AM tomorrow morning. The National Association of Realtors will give us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show a small increase, meaning the housing sector strengthened slightly last month. That would be relatively bad news for the bond market and mortgage pricing, but unless it shows a significant surprise, it shouldn’t have a major impact on mortgage rates.

Low


Neutral


Holiday Schedule

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but the stock and bond markets will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. The same can be said to some degree Wednesday afternoon also. Banks must be open Friday, but we will likely see little change to mortgage rates that day.

---


Unknown


None

Overall, I am expecting Wednesday to be the busiest day for the bond market and mortgage rates with three of the week's releases scheduled, including the FOMC minutes. The calmest day of the week will most likely be Friday. Despite the holiday, this still may end up being an active week for mortgage rates. Accordingly, please proceed extremely cautiously 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... Lock 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.