Rate Lock Advisory

Tuesday, September 29th

Tuesday’s bond market has opened in positive territory despite much stronger than expected economic news. Stocks are mixed but calm with the Dow down 14 points and the Nasdaq up 25 points. The bond market is currently up 3/32 (0.64%), which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 0.64%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Consumer Confidence Index (Conference Board)

Today’s only relevant economic data was September's Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 101.8 that was well above forecasts and a noticeable jump from August’s revised 86.3. The increase means more surveyed consumers felt comfortable about their own financial situations than did last month. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we need to consider the data bad news for mortgage rates. Fortunately, this is only a moderately important release, minimizing the impact on today’s rates.



ADP Employment

Tomorrow morning has two pieces of data that market participants will be watching. The first will be September's ADP Employment report at 8:15 AM ET that tracks changes in private-sector jobs, using ADP's payroll processing clients as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reactions to the report, we should be watching it. Analysts are expecting it to show that 625,000 new payrolls were added. Good news for mortgage rates would be a smaller increase.



GDP Rev 2 (month after Rev 1)

Also tomorrow is the release of the second revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this update having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. Tomorrow’s update is expected to show that the economy contracted at an annual rate of 31.7%, unchanged from last month's estimate. A significant downward revision would be considered favorable news for 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.

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