Rate Lock Advisory

Friday, October 15th

Friday’s bond market has opened in negative territory following surprisingly strong economic data and early stock gains. The major stock indexes are showing sizable gains, pushing the Dow up 308 points while the Nasdaq is up 43 points. The bond market is currently down 14/32 (1.56%), but gains late yesterday should help keep this morning’s mortgage rates close to Thursday’s early pricing. If you saw an improvement in rates before closing yesterday, you may see an increase this morning, erasing that revision.



30 yr - 1.56%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales

Today’s big news was September’s Retail Sales data at 8:30 AM ET. The Commerce Department announced a 0.7% increase in consumer spending, greatly exceeding forecasts of a 0.2% decline. A secondary reading that tracks sales but excludes more costly and volatile auto transactions jumped 0.8% when it was expected to rise only 0.4%. Both readings indicate consumers spent much more last month than many had thought. Because consumer spending makes up over two-thirds of the U.S. economy, this is a sign of economic strength that makes the data very bad news for bonds and mortgage rates.



University of Michigan Consumer Sentiment (Prelim)

The University of Michigan released their Index of Consumer Sentiment for October late this morning. It came in at 71.4, down from September’s 72.8. Forecasts were calling for an increase in sentiment that would have meant surveyed consumers felt better about their own financial situations than they did last month. The decline is a sign that consumers are not as likely to spend money as they were last month, helping to limit economic growth. Therefore, we can consider the index good news for rates. Unfortunately, traders are more focused on the sales data, preventing this index from having a favorable impact on bonds and mortgage rates.




Next week has a handful of moderately important economic releases, starting with Industrial Production data Monday morning. The general theme of the week will be housing with several reports giving us an indication of strength in that sector. None of the releases are considered to be key or expected to have a significant influence on the markets. In addition to the data, there also is another Treasury auction and the Fed Beige Book for the markets to watch. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.