Rate Lock Advisory

Tuesday, November 18th

Tuesday’s bond market has opened in positive territory as concerns about the stock market continue to grow, causing funds to shift into bonds as a safe haven. The Dow is down 543 points while the Nasdaq is down 342 points. The bond market is currently up 11/32 (4.09%), but losses late yesterday should prevent much of an improvement in this morning’s mortgage rates.

11/32

Bonds

30 yr - 4.09%

543

Dow

46,047

342

NASDAQ

22,365

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Positive

ADP Employment

This morning’s release of ADP’s new 4-week Employment Change report showed an average of 2,500 private-sector jobs were shed, which was an improvement from the previous update that revealed an average loss of 11,250 jobs. There are two ways to look at those numbers. One is that the job loss rate is slowing, hinting at strength in the private portion of the employment sector. The other argument is that there are still job losses instead of gains, supporting the theory that the employment sector is in trouble. Either way, it doesn’t appear that this report had a noticeable impact on the bond market or mortgage rates since bonds were posting gains before the report was released.

Low

Neutral

Factory Orders

Also released this morning was August’s Factory Orders report that was previously delayed by the shutdown. It revealed a 1.4% increase in new orders for durable and non-durable goods. This report traditionally doesn’t carry much significance in the markets because a good portion of the data is included in the Durable Goods Orders report that precedes its release. Because of that, and the fact this data is now several months old, we haven’t seen much of a reaction to this report either.

Medium

Unknown

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

There doesn’t appear to be any relevant economic data coming tomorrow, but we do have a Treasury auction taking place that may affect rates during afternoon trading. 20-year bonds are being sold with results set to be announced at 1:00 PM ET. Both of last week’s long-term auctions drew a lackluster demand from investors compared to other recent sales. If tomorrow’s announcement indicates there was stronger demand for the securities than last week’s sales, we may see bond prices rise and mortgage rates improve slightly before the end of the day. On the other hand, another soft sale could pressure the bond market and lead to an upward revision in rates late tomorrow.

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.

Kelly Rivas

Your Home Is My Business

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