Rate Lock Advisory

Wednesday, January 17th

Wednesday’s bond market has opened in negative territory following more stock strength and much stronger than expected economic data. The major stock indexes are showing gains of 108 points in the Dow and 21 points in the Nasdaq. The bond market is currently down 4/32 (2.55%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point if comparing to Tuesday’s early pricing.



30 yr - 2.55%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Industrial Production and Capacity Utilization

December's Industrial Production report was this morning’s only relevant economic data, coming at 9:15 AM ET. It showed a surprising jump of 0.9% in output at U.S. factories, mines and utilities, indicating strength in the manufacturing sector. Because analysts were expecting to see a much small increase, we can consider the data bad news for bonds and mortgage rates.



Fed Beige Book

The Federal Reserve will release their Beige Book at 2:00 PM ET today. 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.



Housing Starts (New Residential Construction)

Tomorrow has two relatively minor pieces of data scheduled for release. The first is December's Housing Starts at 8:30 AM ET. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don't see it causing much movement in mortgage rates, but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see a decline in new home starts between November and December.



Weekly Unemployment Claims (every Thursday)

Also being posted early tomorrow morning is last week’s unemployment figures. They are expected to show that 251,000 new claims for unemployment benefits were filed last week. That would be a decline from the previous week’s 261,000, indicating strength in the employment sector. The higher the number of claims, the better the news it is for mortgage rates. However, since this is only a weekly snapshot, it takes a significant surprise for the numbers to directly affect 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.