Rate Lock Advisory

Sunday, October 20th

This week brings us the release of four economic reports that may influence mortgage rates in addition to two Treasury auctions that have the potential to do so also. The most important data comes later in the week and there is nothing of relevance set for tomorrow.

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Bonds

Market Closed

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Dow

Market Closed

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NASDAQ

Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

The week’s activities start late Tuesday morning with the release of September's Existing Home Sales data. This National Association of Realtor’s report will give us an indication of housing sector strength and mortgage credit demand by tracking home resales. It is expected to show a small increase in sales from August to September, meaning the housing sector was flat. That would be relatively bad news for the bond market since a strengthening housing sector makes broader economic growth more likely and bonds less appealing to investors. Ideally, it will show a sizable decline in sales that points toward a weakening housing sector.

Medium

Unknown

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

Wednesday does not have any relevant economic data but does have the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. 5-year Notes will be sold Wednesday followed by 7-year Notes Thursday. If these sales are met with a strong demand from investors, particularly the first, bond prices may rise during afternoon trading. This could lead to improvements in mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

High

Unknown

Durable Goods Orders

Durable Goods Orders data for September is Thursday's first monthly release, scheduled for 8:30 AM ET. It gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for a 1.0% decline in new orders for products such as airplanes, appliances and electronics. If we see a large increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a larger decline should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance in orders either way, likely will have little effect on Thursday's bond trading or mortgage pricing.

Low

Unknown

New Home Sales

September's New Home Sales is Thursday’s second release, scheduled for 10:00 AM ET. This Commerce Department report covers the small percentage of home sales that Tuesday's Existing Home Sales report doesn't include. It is expected to show a small decline in sales of newly constructed homes, but I don't see this report having much of an impact on mortgage rates unless it shows a significant variance from forecasts.

Medium

Unknown

University of Michigan Consumer Sentiment (Rev)

The week's last report comes at 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. This report is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers' willingness to spend. Current forecasts show this index remaining nearly unchanged from its preliminary reading of 96.0. Good news for mortgage rates would be a sizable decline in the index, meaning consumers are likely to not spend as much in the near future.

Medium

Unknown

Corporate Earnings

Also worth noting is that corporate earnings season is in full swing. There are plenty of big-named companies releasing their quarterly and annual earnings reports this week. Strong earnings are good news for stocks and bad news for bonds. Generally speaking, if earnings are missing expectations, bonds should rally and mortgage rates should move lower. With plenty of them posting this week, stocks could have a heavy influence on bond trading and mortgage pricing.

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Unknown

None

Overall, Thursday is the best candidate for most important day of the week due to the Durable Goods report while Wednesday may be the calmest. There is nothing scheduled for tomorrow, but we may see the markets react to weekend Brexit news that appears to be more stock friendly than favorable for bonds. Even though we don’t have key economic data or relevant Fed events taking place, there still are enough variables in place that could make this a very active week for the markets and mortgage rates. Therefore, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

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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We don't advertise rates on our Home search site but handy links to our main corporate site at Mtgquote.com and our ProQuote.Mortgage app are readily available. Rates are subject to change any business hour with market fluctuations. All loan approvals are conditional, not guaranteed, and subject to lender review of all information. Loan is conditionally approved when lender has issued approval in writing, but until all conditions are met, the loan cannot be funded. Specified rates may not be available for all borrowers. First Equity Home Loan, Inc. is an Equal Opportunity Mortgage Lender/Broker, licensed as a consumer lender in Alabama, NMLS #204559 Call 256-New-Loan for Gadsden Corporate office or 256-Refi-Pro for our Fort Payne branch.
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