Rate Lock Advisory

Tuesday, October 20th

Tuesday’s bond market has opened in positive territory to recover afternoon losses from yesterday. Stocks are mixed again with the Dow up 380 points and the Nasdaq down 48 points. The bond market is currently up 6/32 (5.11%), which should keep this morning’s mortgage rates close to Monday’s early pricing. If you saw an intraday increase late yesterday, you should see an improvement this morning of approximately the same size.

6/32

Bonds

30 yr - 5.11%

380

Dow

52,348

48

NASDAQ

26,382

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Positive

Housing Starts (New Home Construction)

September's Housing Starts report was posted at 8:30 AM ET this morning, revealing a 5.2% drop in new home groundbreakings when analysts were expecting to see an increase. That number includes single-family homes and multi-family projects such as apartments and condos. New starts of single-family homes unexpectedly fell 4.6% last month, likely a result of mortgage rates moving higher. These numbers further support the theory that the housing sector is weak, making the data good news for bonds and mortgage rates.

Medium

Unknown

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

Tomorrow doesn’t have any relevant economic data that we need to watch, but there is a 20-year Treasury Bond auction taking place that may influence rates slightly during afternoon trading. If the sale is met with a strong demand from investors, particularly international buyers, bond prices may rise tomorrow afternoon. This could lead to an improvement in mortgage rates shortly after the results are posted at 1:00 PM ET because they are based on long-term debt also. On the other hand, a lackluster interest in the securities may create selling in the broader bond market and lead to a slight upward revision to rates.

Medium

Unknown

Geopolitical/Financial Issues

Other than corporate earnings releases and potential geopolitical news from the Middle East and/or the Russia/Ukraine that may affect oil and other energy costs, there is little to drive trading the next few days. We have a couple of moderately important reports (at best) scheduled, but none of them carry enough significance to cause a big move in rates. We feel rates are going to hold near current levels for the next few days, unless something totally unexpected happens.

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.

Kelly Rivas

Your Home Is My Business

2372 MORSE AVE 926
IRVINE, CA 92614
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