Rate Lock Advisory

Monday, December 9th

Monday’s bond market has opened in positive territory, recovering more of Friday’s Employment report-related losses. Stocks are mixed with the Dow down 25 points and the Nasdaq up 17 points. The bond market is currently up 6/32 (1.82%), which with late gains Friday should improve this morning’s mortgage rates by approximately .125 of a discount point if comparing to Friday’s early pricing.



30 yr - 1.82%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock




There is nothing of importance taking place today that is expected to affect mortgage rates. The rest of the week has plenty though. We have four pieces of economic data scheduled for release in addition to a couple of Treasury auctions and the last FOMC meeting of the year. Most of the scheduled data is of higher importance to the markets as is any trade news that may come since it has been the hot topic in the markets recently.



Productivity and Costs (Quarterly)

The week’s activities start at 8:30 AM ET tomorrow morning with revised 3rd Quarter Productivity numbers. This index is expected to show a slight upward change from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for bonds. It's the conditions around an expanding economy, such as rising inflation, that hurt bond prices and mortgage rates. Current forecasts are calling an annual rate in productivity of down 0.3%. The stronger the reading, the better the news for the bond market. It is worth noting that this report generally does not have a noticeable impact on mortgage pricing, so it will take a wide variance to draw much attention.



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

Also tomorrow is the first of this week's two relevant Treasury auctions. 10-year Notes will be sold tomorrow and will likely have a bigger influence on mortgage rates than Thursday’s sale. Results of the auction will be posted at 1:00 PM ET, meaning if we get a reaction it will come during early afternoon trading. If it was met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and possibly an improvement to mortgage pricing during afternoon hours. On the other hand, a weak interest could lead to an upward revision in rates.




Overall, Wednesday is the best candidate for most important day for rates, but we may find Friday to be active also. With most of this week’s activities considered to be highly influential on the bond market and mortgage rates, it would be prudent to proceed cautiously if still floating an interest rate and closing in the near future.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.