Rate Lock Advisory

Monday, January 24th

Monday’s bond market has opened in positive territory as global events start to take centerstage. Stocks are helping the cause with significant losses of 645 points in the Dow and 349 points in the Nasdaq. The bond market is currently up 16/32 (1.71%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 1.71%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

There is nothing of importance scheduled for release today, the only day without at least one item. Today’s early bond gains may be tied to the escalating situation in Ukraine with a Russian incursion looking more like a possibility as each day passes. Generally speaking, military conflicts, even globally, tend to boost bond prices as investors seek safe-haven. As bond prices rise, yields and mortgage rates move lower. We often see stocks lose ground at the same time also.




The rest of the week brings us seven relevant monthly and quarterly economic reports that may influence mortgage pricing, in addition to two Treasury auctions and an FOMC meeting. A couple of the reports are considered to be highly important while others are of moderate or low importance.



Consumer Confidence Index

January's Consumer Confidence Index (CCI) is the first, coming at 10:00 AM ET tomorrow. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations is a sign that consumers are less willing to make large purchases in the near future. Analysts are expecting to see a decline from December's reading, indicating consumer confidence was weaker this month than last month. A reading much smaller than the expected 112.0 would be ideal for the bond market and mortgage rates. A higher reading would mean that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher tomorrow.



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

Tomorrow also has the first of two Treasury auctions that we need to watch this week. 5-year Notes will be sold tomorrow, followed by 7-year Notes Thursday. A strong demand for the securities could lead to slightly lower rates. Results will be posted at 1:00 PM ET, so if there is a reaction it will come during early afternoon trading those days.



Federal Open Market Committee (FOMC) Statement

Overall, Wednesday is the best candidate for most active day for rates due to the FOMC meeting, but we may see a noticeable move in pricing Thursday also after the GDP reading and Durable Goods Orders report. With so much going on this week, it is hard to label any day as least important. Don't be surprised to see multiple days with intraday changes in pricing due to morning and afternoon events scheduled three of the days. Accordingly, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.