Rate Lock Advisory

Tuesday, September 18th

Tuesday’s bond market has opened in negative trading despite bond-friendly tariff news. The major stock indexes are in positive ground with the Dow up 37 points and the Nasdaq up 51 points. The bond market is currently down 9/32 (3.02%), which should erase yesterday’s late gains and push this morning’s mortgage rates higher by approximately .125 of a discount point.



30 yr - 3.02%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

The only important news came on the trade-war front with China responding to our latest tariffs on Chinese goods by announcing $60 billion in tariffs on U.S. goods this morning. A trade war is believed to restrict economic growth that generally pressures stocks and makes bonds more attractive to investors, so this morning’s news is favorable for bonds and mortgage rates. We did see a positive reaction to the news during early trading, but it was short-lived and bonds have retreated to their pre-announcement levels.



Bond Trends

The biggest concern is that the benchmark 10-year Treasury Note yield is now above 3.00%. If this holds, it will be time to reconsider mortgage rate projections and whether locking a rate sooner than later is the best plan. There still is time in the day for buyers to step in to push yields lower. This is a pivotal point for mortgage rates though that will be the primary focus the next couple of days.



Housing Starts (New Residential Construction)

There is nothing of importance set for today in terms of economic data. August's Housing Starts will start this week's activities at 8:30 AM ET tomorrow morning. It tracks groundbreakings of new home projects but likely will not affect mortgage rates unless its results vary greatly from forecasts. It is expected to show that starts of new homes rose last month, indicating strength in the housing sector. That is bad news for the bond market and mortgage rates because a stronger housing sector makes broader economic growth more likely. However, this data is not important enough to cause a noticeable change in mortgage rates unless there is a wide variance between forecasts and the actual results.

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.