Rate Lock Advisory

Tuesday, August 19th

Tuesday’s bond market has opened in positive territory despite no substantial favorable news this morning. Stocks are mixed with the Dow up 215 points and the Nasdaq down 64 points. The bond market is currently up 7/32 (4.30%), but weakness late yesterday is going to keep this morning’s mortgage rates close to Monday’s early pricing.

7/32

Bonds

30 yr - 4.30%

215

Dow

45,127

64

NASDAQ

21,564

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Neutral

Housing Starts (New Home Construction)

This morning’s sole economic release was July's Housing Starts report at 8:30 AM ET. It revealed an unexpected rise of 5.2% in new home groundbreakings last month, exceeding expectations. The large increase was fueled mostly by multi-family starts, such as apartments and condos. New groundbreakings of single-family homes that are more relevant to mortgage rates rose 2.8%. However, newly issued permits, an indicator of future starts, fell short of expectations. In short, we are labeling the report neutral for bonds and mortgage rates.

Medium

Unknown

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

Tomorrow doesn’t have any economic releases that we need to be concerned with, but we do get a couple of afternoon events that may influence rates. First will be the results announcement of tomorrow's 20-year Treasury Bond auction at 1:00 PM ET. If investor demand was strong, we could see the broader bond market improve and mortgage rates move slightly lower during afternoon trading. On the other hand, a lackluster interest, indicating a waning appetite for longer-term securities, may pressure bonds and lead to a slight upward revision to rates before the end of the day.

Medium

Unknown

FOMC Meeting Minutes

Next up will be the 2:00 PM ET release of the minutes from last month's FOMC meeting. The key points traders are looking for are discussions amongst Fed members about inflation, the future of the employment sector, and how tariffs may affect the Fed’s plans for key short-term interest rates. However, it is very important to remember that this meeting took place before the surprisingly weak July Employment report was released and before last week’s inflation indexes were posted. Those events likely altered the thought process for some Fed members, but won’t mean anything until next month’s FOMC meeting. The markets are currently predicting the Fed will cut short-term rates a quarter point next month despite what last week’s data told us. In other words, what the minutes show is likely outdated and unreliable now. If they do reveal something unexpected, any reaction will come during mid-afternoon hours tomorrow.

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... Lock if my closing was taking place between 21 and 60 days... Lock 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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