Rate Lock Advisory

Thursday, January 17th

Thursday’s bond market has opened in negative territory with little in terms of news to help the cause. The major stock indexes are mixed but fairly calm, pushing the Dow lower by 28 points and the Nasdaq higher by 10 points. The bond market is currently down 3/32 (2.73%), which should cause this morning’s mortgage rates to be slightly higher than Wednesday’s early pricing.



30 yr - 2.73%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Beige Book

Yesterday afternoon’s release of the Fed Beige Book gave us some favorable news. It showed that the Fed’s business contacts in many most regions were less optimistic about business conditions since the last update. They referenced tariff-related costs, political uncertainty, rising rates and market volatility as some of the reasons for the change in outlook. Slowing manufacturing activity was a focal point also. This is good news for bonds and mortgage rates because the Fed relies heavily on this information when deciding what to do with key short-term interest rates during their FOMC meetings. It is another reason for the Fed to take a more cautious approach towards raising rates and should help keep mortgage rates lower.



Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were today’s only relevant economic data. They showed that 213,000 new claims for unemployment benefits were filed last week, down from the previous week’s 216,000 initial filings. Analysts were expecting to see an increase in claims, hinting that the employment sector may have been stronger than thought last week. That makes the data bad news for bonds and mortgage rates.



Industrial Production and Capacity Utilization

Tomorrow has two moderately important report set for release. The first will be December's Industrial Production report at 9:15 AM ET. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for an increase in production of 0.2% from November's level. A weaker reading would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought.



University of Michigan Consumer Sentiment (Prelim)

The final report of the week is January's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Forecasts are calling for a reading of 96.5, which would be a decline from November’s 98.3. The lower the reading, the better the news it is 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.