Rate Lock Advisory

Thursday, September 17th

Thursday’s bond market opened in positive ground, partly due to weaker than expected economic data. The major stock indexes are showing sizable losses with the Dow down 149 points and the Nasdaq down 127 points. The bond market is currently up 9/32 (0.67%), but this morning’s mortgage rates should be close to Wednesday’s early pricing or slightly lower. Preventing more of an improvement is post-FOMC meeting weakness from late yesterday afternoon.



30 yr - 0.67%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Weekly Unemployment Claims (every Thursday)

The first of this morning’s two economic releases was last week’s unemployment figures that showed 860,000 new claims for benefits were filed. This was a decline from the previous week’s revised 893,000 initial filings but a little higher than forecasts. The decline in claims is a sign that the employment sector improved a bit last week. However, the higher than expected number means it did not improve as much as analysts thought. That means we can consider the data slightly favorable for bonds and mortgage rates.



Housing Starts (New Residential Construction)

Also released at 8:30 AM ET was August's Housing Starts report. It revealed a 5.1% decline in new home groundbreakings, which was a larger decline than expected. This is a sign that the new home portion of the housing sector slowed last month, making the data favorable for mortgage rates. Unfortunately, this is considered to be only a minor piece of data, so its impact on this morning’s mortgage pricing was minimal.



University of Michigan Consumer Sentiment (Prelim)

Tomorrow has two relevant economic reports set to be posted, both coming at 10:00 AM ET. One will be the University of Michigan’s Index of Consumer Sentiment for September that will give us an indication of consumer confidence in their own financial situations. This type of index projects consumer willingness to spend. If a consumer's confidence in their own financial situation is rising, they are more apt to make large purchases in the near future. On the other hand, if they are growing more concerned about their job security or finances, they probably will delay making that sizable purchase. This influences future consumer spending data and therefore, impacts the financial markets. It is expected to show a reading of 75.0 that would mean confidence strengthened slightly from August's level of 74.1. The lower the reading, the better the news it is for mortgage rates.



Leading Economic Indicators (LEI) from the Conference Board

The final report of the week will come from the Conference Board who will post their Leading Economic Indicators (LEI) for August. The moderately important LEI index attempts to predict economic activity over the next three to six months. It is expected to show a 1.3% increase, indicating they are predicting moderate growth in economic activity over the next several months. A larger increase would be considered negative news for bonds and mortgage pricing.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.