Rate Lock Advisory

Sunday, December 4th

This week brings us the release of only four monthly and quarterly economic reports for the markets to digest. One of the group is considered to be highly important, leaving the rest as moderately influential or of low importance. It is safe to assume that we will see much less movement in rates this week than last week. A strong rebound in bonds Friday after initially tanking as a result of strong Employment data, could create an improvement in rates tomorrow if you did not see an intraday revision before closing.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


Factory Orders

October's Factory Orders report will start this week's calendar late tomorrow morning. This Commerce Department report is similar to the Durable Goods Orders data that was released last week, except this one includes new orders for both durable and non-durable goods. It usually doesn't have a significant influence on bond trading since a good portion of the data has previously been made public. Analysts are expecting to see a 0.7% rise in new orders. Favorable news would be a smaller increase because it would signal softer than expected manufacturing sector activity.

Low


Unknown


Productivity and Costs (Quarterly)

Next up is revised 3rd Quarter Productivity numbers Wednesday at 8:30 AM ET. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for bonds. It is the conditions surrounding an expanding economy, such as rising inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for a 0.3% rise in productivity, matching the initial estimate. The stronger the reading, the better the news for the bond market. This report generally does not have a noticeable impact on mortgage pricing though, so it will take a wide variance to draw much attention.

High


Unknown


Producer Price Index (PPI)

Friday has two reports set for release, starting with November's Producer Price Index (PPI) at 8:30 AM ET. This very important release tracks inflationary pressures at the producer or manufacturing level of the economy. There are two portions of the index that are used- the overall reading and the core data. If it reveals stronger than expected readings, indicating that inflationary pressures are stronger than thought, the bond market will probably react negatively. That would drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond by pushing mortgage rates lower. Forecasts are calling for a 0.2% increase in both the overall and core readings.

Medium


Unknown


Univ of Mich Consumer Sentiment (Rev)

The final report of the week is the release of December's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. Friday's release is expected to show a reading of 57.0, which would be a slight increase from last month's final reading of 56.8. A large decline in confidence would be favorable news for rates.

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Unknown


none

Overall, Friday is the key day for rates this week. The calmest day will probably be Tuesday unless something unexpected happens. While it should be much calmer compared to last week, we still should see some movement in rates, especially the latter days. That said, we can get a surprise headline at any time, so keeping an eye on the markets would be prudent if still floating an interest rate and closing in the near future.

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.