Rate Lock Advisory

Friday, October 3rd

Friday’s bond market has opened in negative territory despite somewhat favorable economic news. Stocks are mixed with the Dow up 271 points and the Nasdaq down 6 points. The bond market is currently down 8/32 (4.11%), but bond strength yesterday afternoon should allow this morning’s mortgage rates to be lower by approximately .125 of a discount point. If you saw an intraday improvement before closing Thursday, you may see a modest increase this morning.

8/32


Bonds


30 yr - 4.11%

271


Dow


46,790

6


NASDAQ


22,837

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Positive


ISM Service Index

Today’s only released data that is relevant to the mortgage industry was September’s Institute for Supply Management (ISM) service index at 10:00 AM ET. It came in lower than expected at 50.0 and down from August’s 52.0 to signaling the service sector of the economy may be slowing. There were parts of the report that showed strength, such as employment gains in the sector. However, we can still label the report favorable for bonds and mortgage rates.

Low


Unknown


Fed Talk

We got this morning’s report because the ISM is not a governmental agency and not affected by the shutdown. This morning’s key Employment report was delayed because of the shutdown, as were two reports yesterday. There are still a few Fed speeches throughout the day that may create a headline or two, especially since there isn’t much to drive trading.

Medium


Unknown


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

Next week has several events that we will be watching, but fortunately, no relevant governmental reports were scheduled. There are two long-term Treasury debt auctions scheduled that will still be done since they are considered a necessity and exempt from the impact of the shutdown. The minutes from last month’s FOMC meeting will also be released because the Fed is considered independent from the federal government. In addition to those events, there are also a large number of Fed-member speaking engagements happening next week. There is nothing of importance scheduled for Monday. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.