Rate Lock Advisory

Tuesday, January 16th

Tuesday’s bond market has opened up slightly despite a sizable stock rally to start the week. The major stock indexes are posting strong gains with the Dow up 248 points and the Nasdaq up 55 points. The bond market is currently up 2/32 (2.54%), which with strength late Friday should improve this morning’s mortgage rates by approximately .125 of a discount point if comparing to Friday’s early pricing. If your lender revised rates lower Friday afternoon, then you should see little change to this morning’s rates. The financial markets were closed yesterday for the Martin Luther King holiday.

2/32


Bonds


30 yr - 2.54%

248


Dow


26,051

55


NASDAQ


7,316

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


Geopolitical/Financial Issues

There is nothing of relevance to mortgage rates taking place today. The rest of the week brings us the release of four pieces of monthly economic data for the markets to digest, with none of them considered to be highly important for mortgage rates. We also will be watching events surrounding the potential government shutdown that will take place Friday night if no deal is made in Washington D.C.

Medium


Unknown


Industrial Production and Capacity Utilization

Activities start with December's Industrial Production report at 9:15 AM ET tomorrow. 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 0.4% 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.

Medium


Unknown


Fed Beige Book

Also tomorrow is the Federal Reserve's Beige Book at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

Medium


Unknown


None

Overall, no day clearly stands out as the most important for mortgage rates. Tomorrow is a decent candidate with two reports set for release, but none of this week’s data is considered highly important. We could see movement in mortgage pricing multiple days, although it is likely to be in small increments rather than large noticeable moves. Despite the lack of key data, it still would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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.