Rate Lock Advisory

Wednesday, January 27th

Wednesday’s bond market has opened in positive territory, reacting to somewhat favorable economic news and early stock selling. The major stock indexes are showing sizable losses with the Dow down 443 points and the Nasdaq down 153 points. The bond market is currently up 7/32 (1.00%), which combined with gains from late yesterday, should improve this morning’s mortgage rates by approximately .250 of a discount point. If you saw an intraday improvement Tuesday afternoon, you should see a smaller improvement this morning.



30 yr - 1.00%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 5-year Treasury Note auction did not draw a strong demand. The benchmarks used to gauge investor interest in the securities showed a below average demand. Fortunately, the results did not derail the afternoon rally in bonds that led to some lenders making an intraday improvement to rates. We have the 7-year Note auction to deal with tomorrow, but day one of this two-day auction cycle usually has the larger impact on rates. Results of tomorrow’s sale will be posted at 1:00 PM ET, meaning it will be an afternoon event to watch.



Durable Goods Orders

December’s Durable Goods Orders report was released at 8:30 AM ET this morning, revealing a 0.2% rise in new orders for big-ticket products such as airplanes, appliances and electronics. This was weaker than the 0.9% increase that was expected, but the size of the variance isn’t as important in this report as it is in others. That is because this data is known to be quite volatile from month to month, meaning large swings are common. Still, we can consider the data slightly favorable for mortgage rates as it indicates weaker than forecasted manufacturing activity.



Federal Open Market Committee (FOMC) Statement

This week’s FOMC meeting will adjourn at 2:00 PM ET today. It is extremely unlikely the Fed will alter key short-term interest rates at this time. Traders will be looking at the post-meeting statement for changes in the Fed’s future plans, particularly regarding their bond buying program and potential inflation concerns. The meeting will be followed by a press conference with Chairman Powell at 2:30 PM ET but does not include revised economic projections. This is an afternoon event that could have a big impact on the financial and mortgage markets if there are any surprises.



Gross Domestic Product (GDP)

Tomorrow has several reports set for release, including the highly important initial GDP reading. Those reports will be covered in this afternoon’s update that will be posted shortly after the markets have an opportunity to react to the FOMC events.

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.