Rate Lock Advisory

Monday, August 18th

Monday’s bond market has opened slightly in negative territory as traders wait for this week’s Fed and geopolitical news. Stocks are calm as they wait for news also. The Dow is down 8 points while the Nasdaq has lost 12 points. The bond market is currently down 2/32 (4.32%), which with weakness late Friday should cause this morning’s mortgage rates to be higher by approximately .125 of a discount point.

2/32

Bonds

30 yr - 4.32%

8

Dow

44,937

12

NASDAQ

21,610

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Geopolitical/Financial Issues

There is nothing of importance set for release today, the only day of the week without something listed that may influence bond trading and/or mortgage pricing. Today’s White House meeting with President Trump and European leaders may create some headlines that move the markets later. Other than that, there is little to drive trading this morning.

High

Unknown

Fed Talk

The remainder of the week has only three monthly economic reports scheduled with none of them considered to be key or highly important releases. In addition to the data, there is a Treasury auction and FOMC minutes release midweek and a handful of Fed speaking engagements, one with Fed Chairman Powell late in the week. While the week should be calmer for rates than the past couple, we still could see noticeable changes in pricing- especially as the week progresses.

Low

Unknown

Housing Starts (New Home Construction)

July's Housing Starts report will be posted at 8:30 AM ET tomorrow. It tracks new home groundbreakings, giving us an indication of strength in the new home portion of the housing sector and future mortgage credit demand. It usually doesn't cause much movement in mortgage rates unless it varies greatly from forecasts and its’ results are the only headlines of the day. Analysts expect the report to show a small decline in new home groundbreakings. The lower the number of starts, the better the news for the bond market, as it would hint at a weaker than expected new home portion of the housing sector.

---

Unknown

none

Overall, no single day stands out as likely to be the most active for rates, but Friday has the potential to do so because Chairman Powell is speaking at the Fed’s Jackson Hole conference. Wednesday afternoon's Fed minutes release has the potential to draw a reaction in the bond market also. The calmest day of the week will likely be tomorrow unless something 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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

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