Rate Lock Advisory

Thursday, November 15th

Thursday’s bond market has opened in positive territory as concerns about Britain’s smooth exit from the European Union (Brexit) continues to rattle the stock markets, to the benefit of bonds. The Dow is currently down 280 points while the Nasdaq has lost 47 points. The bond market is currently up 12/32 (3.08%), which with yesterday’s late rally should improve this morning’s mortgage rates by approximately .250 of a discount point if comparing to Wednesday’s morning pricing. If your lender revised rates lower yesterday afternoon, you likely will see a smaller improvement this morning.



30 yr - 3.08%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Talk

Fed Chairman Powell’s speaking engagement last night yielded few surprises. His comments were generally upbeat about the economy with a reference to keeping an eye on the housing market. He reiterated that inflation is on track for their expectations, indicating that rampant inflation is not much of a concern to them. It does not appear that his words are fueling this morning’s bond gains. We saw bonds rally late yesterday (well before he spoke) on Brexit-related news that caused stocks to do an about-face. After being up over 100 points during morning trading yesterday, the Dow closed down over 200 points. This morning’s gains are more about a continuation of yesterday’s rally then they are of last night’s comments by Chairman Powell.



Retail Sales

October's Retail Sales data were posted at 8:30 AM ET this morning. The Commerce Department announced a 0.8% rise in consumer level spending last month. This was noticeably stronger than the 0.5% increase that was expected. Even a secondary reading that excludes more volatile and costly auto transactions came in stronger than expected, meaning consumers spent more than thought. Because consumer spending makes up such a large portion of our economy, this was bad news for bonds and mortgage rates. A downward revision to September’s sales that changed from up 0.1% to down 0.1% may be softening the impact of this morning’s stronger than forecasted headline number.



Weekly Unemployment Claims (every Thursday)

Also posted early this morning was last week’s unemployment update. It showed that 216,000 new claims for unemployment benefits were filed last week. This was slightly stronger than the 214,000 that was expected. However, since this is just a weekly update it has had no impact on today’s bond trading or mortgage pricing.



Industrial Production and Capacity Utilization

The week’s calendar will close mid-morning tomorrow with the release of October’s Industrial Production data. The 9:15 AM ET report will give us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are calling for a 0.3% increase in production, indicating moderate strength in the manufacturing sector. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is not expected to greatly influence the markets. Therefore, it will likely take a sizable variance from forecasts for it to have a noticeable impact on mortgage pricing.

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... 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.