Rate Lock Advisory

Monday, September 27th

Monday’s bond market has opened in negative territory, extending the negative momentum from last week. Stocks are starting the week mixed with the Dow up 257 points and the Nasdaq down 98 points. The bond market is currently down 8/32 (1.47%), but gains late Friday should allow this morning’s mortgage rates to be lower by approximately .125 of a discount. If you saw an intraday improvement Friday afternoon, you may see an increase in today’s early rates.

8/32

Bonds

30 yr - 1.47%

257

Dow

35,055

98

NASDAQ

14,949

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Neutral

Durable Goods Orders

Kicking off this week’s economic calendar was the highly important August Durable Goods Orders report at 10:00 AM ET. It showed a 1.8% rise in new orders at U.S. factories for big-ticket products. This was a larger increase than analysts were expecting, hinting at manufacturing sector strength. However, a secondary reading within the report that excludes more costly and volatile orders for airplanes and related products came in weaker than forecasts. That allows us to consider the data neutral to slightly negative for rates.

Medium

Unknown

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

We also have the first of this week's two potentially influential Treasury auctions taking place today. The Treasury is selling 5-year Notes today and 7-year Notes tomorrow. They will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction will come during afternoon trading today and/or tomorrow.

Medium

Unknown

Consumer Confidence Index (Conference Board)

Tomorrow’s sole economic report is September's Consumer Confidence Index (CCI) at 10:00 AM ET. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a rise in confidence from August's reading, indicating that consumers were more optimistic about their own financial situations than last month. This means they are more likely to make a large purchase in the near future. Because consumer spending makes up almost 70% of the U.S. economy, good news for rates would be a decline. Analysts are calling for a reading of approximately 114.4, up from August's 113.8. The smaller the reading, the better the news for the bond market and mortgage rates.

High

Unknown

None

Overall, Friday is the most important day of the week due to the significance of the three economic reports being released, assuming the budget and debt ceiling issues in Washington D.C. get worked out. The best candidate for calmest day is Wednesday. We have plenty scheduled this week that is expected to affect rates. We need to see weaker results in this week’s big reports for bond yields and mortgage rates to recover last week’s losses.

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.

Delphi Investment Realty

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