Rate Lock Advisory

Friday, July 18th

Friday’s bond market has opened in positive territory following somewhat favorable economic data. Stocks are mixed with the Dow down 115 points and the Nasdaq up 26 points. The bond market is currently up 5/32 (4.43). This should offset slight weakness from late yesterday to keep this morning’s mortgage rates close to Thursday’s early pricing.

5/32

Bonds

30 yr - 4.43

115

Dow

44,369

26

NASDAQ

20,908

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Positive

Housing Starts (New Home Construction)

June's Housing Starts report was posted at 8:30 AM ET this morning, revealing a 4.6% jump in new home groundbreakings. A secondary reading that tracks newly issued permits that are needed before future starts rose 0.2%. Both were stronger than expected. However, the increase in overall starts was fueled by multi-family projects such as apartments and condos. Single-family groundbreakings, which are much more relevant to the bond market and mortgage rates, fell by the same 4.6% last month. This is a sign of weakness in the relevant portion of the housing sector, allowing us to label the report favorable for mortgage pricing.

Medium

Neutral

Univ of Mich Consumer Sentiment (Prelim)

The University of Michigan’s Index of Consumer Sentiment closed this week’s packed economic calendar. They announced the preliminary reading for July stood at 61.8, up from May’s final reading of 60.7. The increase means surveyed consumers feel better about their own financial and employment situations than they did last month and are likely to spend more. While the headline number is bad news for rates, a secondary reading that reflects opinions about inflation in the future came in lower than expected. The two readings seem to offset each other, preventing them from having an impact on this morning’s rates.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

Next week’s calendar is much lighter than this week with a small handful of relevant economic reports scheduled for release, none of which are nearly as important or considered to be key as some of this week’s data was. There is also a Treasury auction midweek that may come into play during afternoon trading one day. The week starts with the release of the moderately important Leading Economic Indicators late Monday morning. Fed Chairman Powell has a speaking engagement Tuesday at a banking conference in Washington DC, but because this falls within the Fed’s pre-FOMC quiet period it is highly unlikely he will say anything that is relevant to mortgage rates. Look for details on all of next week’s scheduled 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... 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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