Rate Lock Advisory

Tuesday, January 25th

Tuesday’s bond market has opened in positive territory again with stocks showing heavy losses again. The Dow is currently down 672 points while the Nasdaq is down 379 points. The bond market is currently up 12/32 (1.73%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

12/32


Bonds


30 yr - 1.73%

672


Dow


33,691

379


NASDAQ


13,475

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Neutral


Consumer Confidence Index

Starting this week’s economic releases was January's Consumer Confidence Index (CCI) at 10:00 AM ET this morning. The Conference Board announced a reading of 113.8 that was a decline from December’s reading but higher than forecasted. The decline means surveyed consumers were less optimistic about their own financial situations than they were last month and less likely to make a large purchase in the near future. However, since it came in a bit stronger than predicted, we can consider the data neutral for mortgage rates.

Medium


Unknown


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

We also have the results of today’s 5-year Treasury Note auction to watch. They will be posted at 1:00 PM ET, meaning if there is a reaction, it will come during early afternoon trading. A strong demand from investors could help boost bond prices and lower mortgage rates slightly later today. On the other hand, a lackluster interest in the securities would be unfavorable for mortgage rates.

Low


Unknown


New Home Sales

There is an economic release set for tomorrow morning, but it is not considered to be of high importance and is nowhere near as influential as the afternoon events. The economic report is December's New Home Sales data at 10:00 AM ET. It measures housing sector strength and mortgage credit demand. However, it usually does not have a significant impact on bond trading or mortgage rates unless it comes out with a significant surprise because it covers such a small part of all home sales. Tomorrow’s update is expected to show an increase in sales of newly constructed homes, hinting at strength in the new home portion of the housing sector. The smaller the number of sales, the better the news it is for bonds and mortgage rates.

High


Unknown


Federal Open Market Committee (FOMC) Statement

Tomorrow’s big news will come during afternoon trading when this week’s FOMC meeting adjourns at 2:00 PM ET. There is a strong consensus that Fed Chairman Powell and friends will leave key short-term interest rates unchanged at this meeting. Still, there is a high likelihood of seeing volatility in the markets tomorrow afternoon. Traders will be looking at the post-meeting statement for clarification of the Fed's plans, particularly regarding when they will start raising short-term rates. Many analysts think that the March meeting is the timetable they will follow. Any indication of it coming sooner should be taken as bad news for bond and mortgage rates. A later date should help boost bonds and lower rates during afternoon trading. This meeting will be followed by a press conference with Chairman Powell but does not include revised economic projections. This is an afternoon event that could have a big impact on the financial and mortgage markets tomorrow afternoon and Thursday morning.

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.


Delphi Investment Realty

6303 Blue Lagoon Drive Suite 400
Miami, FL 33126