Rate Lock Advisory

Tuesday, October 22th

Tuesday’s bond market has opened in positive territory, partly a result of favorable economic news. Stocks are fairly calm with the Dow up 9 points and the Nasdaq up 20 points. The bond market is currently up 8/32 (1.77%), but weakness late yesterday should cause this morning’s mortgage rates to be a little higher than Monday’s early pricing. If you saw an afternoon upward revision yesterday, you may see a slight improvement this morning.

8/32

Bonds

30 yr - 1.77%

9

Dow

26,837

20

NASDAQ

8,183

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Existing Home Sales from National Assoc of Realtors

The National Association of Realtors gave us their Existing Home Sales report late this morning, announcing a 2.2% decline in September’s home resales. This was a larger decline than was expected, indicating weakness in the housing sector. That is good news for bonds and mortgage rates because a softening housing sector makes broader economic growth less likely, leaving bonds more attractive to investors.

Medium

Unknown

Geopolitical/Financial Issues

Bonds were in positive ground before this morning’s housing data was posted. It appears that may be a result of Brexit-related news. There is a vote in Britain’s Parliament at 2:00 PM ET that is considered to be extremely important and will likely direct how the breakaway from the EU will proceed. Signs of a messy divorce in the near future should be favorable for mortgage rates here while a delay/extension or deals in place with EU members will likely have a negative impact on bonds and mortgage pricing. Look for a reaction to this during mid-afternoon trading today.

Medium

Unknown

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

Tomorrow does not have any relevant economic data but does have the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. 5-year Notes will be sold tomorrow followed by 7-year Notes Thursday. If these sales are met with a strong demand from investors, particularly the first, bond prices may rise during afternoon trading. This could lead to improvements in mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

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.

James M. Dix

NMLS 135621
james@jamesmdix.com
(317) 288-9434
8610 East 106th Street
Fishers, IN 46037
  AmeriFirst Home Mortgage NMLS 110139 A division of AmeriFirst Financial Corporation www.amerifirst.com
Not all borrowers will qualify; contact us for more information on fees and terms
 

Use of any of the linked calculators is to establish a general estimate only. Additional fees could be required and are not part of these calculations. These calculators are not specific to any mortgage loan program and are based on an excellent credit score. Not all borrowers will qualify; contact us for more information on fees and terms. This is not a commitment to lend. Not intended as accounting or investment advice.  Interest above the fair market value is not tax deductible for federal taxes.  Contact your tax preparer for more information



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