Rate Lock Advisory

Wednesday, July 19th

Wednesday’s bond market has opened down slightly following stronger than expected housing news. The stock markets are showing gains of 22 points in the Dow and 24 points in the Nasdaq. The bond market is currently down 2/32 (2.26%), which should keep this morning’s mortgage rates at yesterday’s levels.

2/32


Bonds


30 yr - 2.26%

22


Dow


21,597

24


NASDAQ


6,368

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Negative


Housing Starts (New Residential Construction)

Today’s only relevant economic data was June's Housing Starts at 8:30 AM ET. It showed that new home groundbreakings jumped 8.3% last night, exceeding forecasts. The number of starts was much higher than analysts were expecting to see, hinting at strong growth in the new home portion of the housing sector. However, an upward revision to May’s starts meant that the headline percentage increase was not as much of a surprise as the data actually showed. Either way, the data was stronger than expected, making the report negative news for bonds and mortgage rates. Fortunately, this is not considered to be a highly important release or we would have seen a much stronger impact on today’s pricing.

Low


Unknown


Weekly Unemployment Claims (every Thursday)

Tomorrow has two minor reports scheduled. The first of them will be last week’s unemployment figures at 8:30 AM ET. They are expected to show that 245,000 new claims for unemployment benefits were filed last week, down from the previous week’s 247,000 initial claims. Since rising claims indicates employment sector weakness, the higher the number the better the news it is for mortgage rates. Although, because this is only a weekly report, it likely will have little influence on tomorrow’s mortgage rates unless it shows a significant variance.

Medium


Unknown


Leading Economic Indicators (LEI) from the Conference Board

Late tomorrow morning will be the release of June's Leading Economic Indicators (LEI). This Conference Board index attempts to measure economic activity over the next three to six months. While it is not a factual report, it still is considered to be of moderate importance to the bond market. It is expected to show a 0.4% increase, meaning it is predicting gains in economic growth over the next few months. A decline in the index would be good news for the bond and mortgage markets.

Medium


Unknown


Corporate Earnings

We also have corporate earnings to watch for. Stronger than thought earnings results should fuel stock buying and possibly lead to bond selling that pushes mortgage rates higher. On the other hand, weaker earnings reports usually causes funds to shifts from stocks into bonds. That would benefit mortgage shoppers.

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.