Rate Lock Advisory

Wednesday, September 17th

Wednesday’s bond market has opened flat as traders await this afternoon’s Fed events. Stocks are mixed with the Dow up 262 points and the Nasdaq down 96 points. The bond market is currently up 1/32 (4.02%), which should keep this morning’s mortgage rates close to Tuesday’s early pricing.

1/32

Bonds

30 yr - 4.02%

262

Dow

46,219

96

NASDAQ

22,237

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

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

Yesterday’s 20-year Treasury Bond auction went pretty well with the benchmarks pointing to a decent demand from investors. Bonds had a minor reaction to the 1:00 PM ET results announcement, but it wasn’t enough to cause widespread revisions to rates. This leaves us to label the auction neutral for mortgage rates.

Low

Positive

Housing Starts (New Home Construction)

August's Housing Starts report was posted at 8:30 AM ET, revealing an 8.5% decline in new home groundbreakings. This was a larger than expected decline, pointing to weakness in the new home portion of the housing market. The headline number covers single-family and multi-family homes, such as apartments and condos. Starts of single-family homes that are more relevant to mortgage rates fell 7.0%. Newly issued permits, which help predict future groundbreakings, dropped 2.2%. The data is favorable for bonds and mortgage rates, but doesn’t carry enough importance in the markets to move mortgage pricing on a Fed day.

High

Unknown

Federal Open Market Committee (FOMC) Statement

Today’s big news will come this afternoon when this week’s FOMC meeting adjourns at 2:00 PM ET. It is expected to bring a cut of at least a quarter-point to key short-term interest rates. Some analysts are predicting a half-point or jumbo cut today while most are predicting the smaller size. This would be the first such move since December, which was the final of three consecutive rate cuts late last year. Equally important as what the Fed does today are their future plans also. There are FOMC meetings scheduled for October and December, meaning the markets are just as interested in what will happen at those meetings as they are about today’s action.

High

Negative

General Bond Trends

Something worth mentioning about the size of today’s likely reduction is that we are literally one year from the Fed’s last half-point cut to short-term rates. It was the September 2024 FOMC meeting when they surprised some in the markets with the jumbo rate cut. Unfortunately, the move didn’t have the effect on rates that we had expected. The benchmark 10-year Treasury Note yield was at 3.68% the morning of the meeting and rose after the announcement instead of dropping. It stood at 3.71% the day after the adjournment before reaching 4.07% the first week of October 2024. From there, it kept moving higher, standing at 4.38% on November 1st and 4.57% as the year came to a close, even though the Fed made quarter-point cuts during their November and December meetings. The reaction in bonds led to significant increases in mortgage rates along the way, leaving many of us scratching our heads trying to figure out why.

High

Unknown

General Bond Trends

The point to remembering what happened one year ago is that, despite what the media tends to tell us, the Fed lowering key rates does not necessarily translate into lower mortgage pricing for borrowers. This is why we should remain cautious heading into this afternoon’s activities, particularly if still floating an interest rate. The Fed lowering short-term rates will make some borrowing cheaper for consumers and businesses, but may not give the relief that home shoppers are looking for because mortgage rates are based on long-term securities.

High

Unknown

Misc Fed

The meeting will adjourn and the release of the post-meeting statement will both happen at 2:00 PM ET. This is also the time revised economic projections will be made available. Those economic projections also include the Fed’s so-called Dot Plot that tells us where individual Fed members think these short-term rates will be in the future. This is another way the Fed is telling us how they think will happen to key rates in the future. The press conference with Fed Chairman Powell will begin at 2:30 PM ET.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

We will be updating this report shortly after the markets have an opportunity to react to this afternoon’s Fed events. There are two moderately important reports set for release tomorrow morning- weekly unemployment claims and Leading Economic Indicators. They will be addressed in this afternoon’s revision.

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.

Cal Green Lending Inc.

Loan Officer NMLS #325612 BRE #s01173755 - Company NMLS #1045119 BRE #01936439
NMLS Consumer Access
118 Howell Mountain Rd. | Angwin, CA 94508

EHO logo EHL logo



Portions Copyright © 2025 Pipeline ROI, LLC
Another website by Pipeline ROI.  | Terms of Use | Site Map