Rate Lock Advisory

Thursday, January 23th

Thursday’s bond market has opened in positive territory due to favorable news from overseas and a weak open in stocks. The major stock indexes are showing losses of 102 points in the Dow and 8 points in the Nasdaq. The bond market is currently up 11/32 (1.73%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 1.73%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Leading Economic Indicators (LEI) from the Conference Board

December's Leading Economic Indicators (LEI) was today’s only monthly economic report. The Conference Board announced a 0.3% decline in the index, indicating it is predicting softer economic activity over the next three to six months. That is good news for bonds because they tend to thrive during weaker economic conditions, pushing mortgage rates lower. However, this data is not the cause of this morning’s bond gains.



Geopolitical/Financial Issues

What seems to be driving bond trading this morning was news from the European Central Bank (ECB) that hints they will need to continue current and possibly expand to new ways to boost economic activity. The global bond markets are taking that to mean there is concern about future economic growth that makes bonds more appealing to investors and leads to lower yields and mortgage rates. There wasn’t too much factual data in the release that directly affects us, but the fact more stimulus may be needed is helping to rally bonds this morning.



Stock Influences

Tomorrow doesn’t have anything scheduled for release that is relevant to mortgage rates. We can expect to see more reaction to stock movement and overseas news than anything else. News that causes stocks to fall is usually favorable for bonds and vice versa. As bonds rally, their yields move lower. Since mortgage rates tend to track bond yields, this would lead to lower rates.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.