Rate Lock Advisory

Thursday, December 4th

Thursday’s bond market has opened in negative territory following unfavorable employment news. Stocks are fairly calm but mixed with the Dow up 34 points and the Nasdaq down 26 points. The bond market is currently down 8/32 (4.09%), which should cause an increase in this morning’s mortgage rates of approximately .125 - .250 of a discount point.

8/32

Bonds

30 yr - 4.09%

34

Dow

47,916

26

NASDAQ

23,427

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were this morning’s only relevant economic data. They revealed only 191,000 new people filed for jobless benefits, falling well short of the 225,000 that was expected. This was the lowest number since 2022, giving us a sign of strength in the employment sector. Accordingly, the data is bad news for bonds and mortgage rates.

Medium

Unknown

Personal Income and Outlays

Tomorrow brings us some data that is traditionally very important to the financial and mortgage markets but is aged now because the government shutdown delayed its release. We are still expecting it to draw a relatively strong reaction, especially if it shows a noticeable variance from forecasts since this is the last major economic release before next week’s much-debated FOMC meeting

Medium

Unknown

Personal Income and Outlays

The 8:30 AM ET report title is September’s Personal Income and Outlays that tells us about consumer ability to spend and their spending habits. Rising income gives consumers stronger spending power and consumer spending makes up over two-thirds of the U.S. economy. Both readings are forecasted to rise 0.4% for September.

High

Unknown

Inflation News

However, it is not the income and outlay readings that draw the most attention. What makes this report so important are the Personal Consumption Expenditures (PCE) indexes in the data. These are the Fed’s preferred inflation indexes, which they rely on to make monetary policy decisions during their FOMC meetings. Forecasts have the overall PCE rising 0.3% and the core PCE up 0.2% for September. On an annual basis, analysts are expecting to see the overall rate rise 0.1% to 2.8% while the year-over-year core pace held at August’s 2.9%. Favorable news for rates would be smaller increases in all of the report’s readings.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

Closing out this week's economic calendar will be the University of Michigan's initial Index of Consumer Sentiment for December at 10:00 AM ET tomorrow. Forecasts have this month’s reading higher than November's final reading, meaning surveyed consumers currently feel better about their own financial and employment situations than they did last month. Since stronger sentiment is an indication that consumers are more willing to spend, a lower reading would be considered good news for mortgage rates.

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.

SouthWind Mortgage, Inc. NMLS #276161

Donald J Cahill Jr 275838 | Cherise D Cahill 275837

1975 Sanburys Way Suite 103
West Palm Beach, FL 33411
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