Rate Lock Advisory

Thursday, January 20th

Thursday’s bond market has opened in positive territory, extending yesterday’s positive rebound. The stock markets are also showing gains, pushing the Dow up 275 points and the Nasdaq up 198 points. The bond market is currently up 6/32 (1.83%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

6/32

Bonds

30 yr - 1.83%

275

Dow

35,303

198

NASDAQ

14,538

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 20-year Treasury Bond auction drew a stronger demand from investors than was expected. The benchmarks we use to gauge interest showed a decent appetite for the securities. Bonds had already improved from morning levels before the results were posted at 1:00 PM, but news of the strong demand may have helped keep those gains.

Low

Positive

Weekly Unemployment Claims (every Thursday)

The first of this morning’s two economic reports was last week’s unemployment update that showed 286,000 new claims for benefits were filed. This was an increase from the previous week, higher than expectations of 211,000 and the highest weekly number in three months. We can label this as good news for bonds and mortgage rates since it is a sign of a weakening employment sector. However, because it is just a weekly snapshot, it doesn’t carry much weight in the markets unless it reveals a significant surprise.

Medium

Positive

Existing Home Sales from National Assoc of Realtors

Also posted this morning was December's Existing Home Sales from the National Association of Realtors. They announced a 4.6% decline in sales of existing homes last month. This was also weaker than expected and shows the housing sector was softer than many had thought. Accordingly we can consider the data favorable for mortgage rates.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

The final report of the week will be December's Leading Economic Indicators (LEI) at 10:00 AM ET tomorrow. The Conference Board compiles the data and releases this report monthly. It attempts to predict economic activity over the next several months, but since it is posted by a non-governmental agency, it is not considered to be of high importance to the financial and mortgage markets. Tomorrow's release is expected to reveal a 0.7% rise, meaning the indicators are predicting growth in economic activity over the next several months. As long as we don't see a noticeable increase, I don't think this data will have much of an impact on mortgage pricing either.

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.


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Southwind Mortgage, Inc 276161
Donald J Cahill Jr 275838
Cherise D Cahill 275837
1975 Sansbury's Way, Suite 103
West Palm Beach, FL, 33411


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