Rate Lock Advisory

Tuesday, October 23th

Tuesday’s bond market has opened well in positive territory due significant stock losses during early trading. The Dow is currently down 456 points while the Nasdaq has lost 177 points. The bond market is currently up 22/32 (3.11%), which should improve this morning’s mortgage rates by approximately .125 -.250 of a discount point.



30 yr - 3.11%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

The major stock indexes are in step this morning with other global stock markets. Stocks across the globe went into selling mode as concerns about economic growth rose. Britain’s pending exit from the European Union (Brexit) is not going smoothly and rising concerns about Italy’s financial situation are two major contributors. Stocks tend to do well in stronger economic conditions, so the renewed concerns make stocks less appealing to investors. As investors lose interest in stocks, they tend to shift funds into bonds as a safe-haven. We are seeing a textbook example of the flight to safety in today’s trading.



Stock Influences

As funds move into bonds, prices rise and yields move lower. Because mortgage rates tend to track bond yields, today’s events are good news for mortgage shoppers. However, it is worth noting that stocks can be quite volatile. Therefore, if the concerns fueling today’s stock selling ease in the markets, we could see a reversal that brings funds back into stocks fairly quickly. That could lead to mortgage rates moving higher quickly also.



New Home Sales

September's New Home Sales will start the week’s calendar late tomorrow morning. This Commerce Department report covers the small percentage of home sales that last week's Existing Home Sales report didn't include. It is expected to show a small decline in sales of newly constructed homes, but I don't see this report having much of an impact on mortgage rates unless it shows a significant variance from forecasts.



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

Tomorrow also has the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. 5-year Treasury Notes will be sold tomorrow while 7-year Notes go Thursday. If these sales are met with a strong demand from investors, particularly the first, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But, a lackluster investor interest may create selling in the broader bond market and lead to slight upward afternoon revisions to mortgage rates.

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.