Rate Lock Advisory

Friday, December 26th

Friday’s bond market has opened in positive territory, extending Wednesday’s afternoon gains. Stocks are showing minor losses in early trading, pushing the Dow lower by 29 points and the Nasdaq down 26 points. The bond market is currently up 4/32 (4.11%), which should allow this morning’s mortgage rates to be lower than Wednesday’s morning pricing by approximately .250 of a discount point. If you saw an intraday improvement Wednesday, you should see a smaller change this morning than those that did not get a revision. The markets were closed yesterday for the Christmas Day holiday.

4/32

Bonds

30 yr - 4.11%

29

Dow

48,701

26

NASDAQ

23,587

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Positive

Treasury Auctions (5,7,10,20,30 year)

Wednesday’s 7-year Treasury Note auction gave us a mixed bag of indications about investor demand. Some of the benchmarks pointed to a strong interest in the securities while others suggested not so much. We can label the auction successful compared to last month’s 7-year Note sale, but the benchmarks were less favorable if compared to a longer-term average. Still, the short-term comparison seemed to take the lead, helping bonds to improve after results were announced at 11:30 AM ET. This led to some lenders issuing an intraday improvement to mortgage pricing before the early bond market closing at 2:00 PM.

Low

Neutral

None

There are no relevant economic data or other events scheduled for today. It should be a relatively quiet day for rates unless something unexpected happens. We should see light trading in the bond market as many traders are still home for the extended-holiday weekend.

Medium

Unknown

FOMC Meeting Minutes

Next week is another holiday-shortened week that brings us little for the markets to digest. The calendar appears to just show the minutes from this month’s FOMC meeting Tuesday afternoon and weekly unemployment figures Wednesday morning. The bond market will close early again Wednesday afternoon, but stocks will trade a full day. All markets will be closed Thursday for the New Year’s Day holiday.

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... 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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