Rate Lock Advisory

Thursday, January 16th

Thursday’s bond market has opened in negative territory following mixed economic news and a strong open in stocks. The Dow is currently up 170 points while the Nasdaq has gained 78 points. The bond market is currently down 4/32 (1.80%), which should keep this morning’s mortgage rates very close to yesterday’s early pricing.



30 yr - 1.80%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Beige Book

Yesterday afternoon’s release of the Fed Beige Book showed mixed signals on economic activity but no major surprises. The overall tone of the report was modest growth in economic activity over the previous six weeks. There were signs of weakness in the manufacturing sector that stood out and consumer spending continues to fuel the majority of growth. However, there was nothing in the report that warranted a reaction in the markets. Bonds barely moved after its release at 2:00 PM ET, meaning it had no impact on mortgage rates.



Retail Sales

December Retail Sales report was posted at 8:30 AM ET this morning, revealing a 0.3% rise in consumer spending that was slightly weaker than expectations. While that is somewhat favorable news, a secondary reading that excludes volatile and more costly auto transactions showed a larger than forecasted increase. The ex-auto reading is preventing a positive reaction to the headline reading this morning. In other words, the report has not had much of an influence on this morning’s mortgage pricing.



Housing Starts (New Residential Construction)

Tomorrow has the remaining three reports, starting with December’s Housing Starts at 8:30 AM ET. It will tell us how many new home groundbreakings took place during the month. While this data gives us a small indication of housing sector strength, it is not known to be highly influential on mortgage rates. Accordingly, it will take a large variance from forecasts for the report to have a direct impact on mortgage rates. Forecasts show an increase in new home sales.



Industrial Production and Capacity Utilization

December's Industrial Production report is scheduled for 9:15 AM ET tomorrow. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for an increase in production of 0.1% from November's level. A decline in output would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought.



University of Michigan Consumer Sentiment (Prelim)

The final report of the week is January's preliminary reading to the University of Michigan's Index of Consumer Sentiment that measures consumer willingness to spend. It can usually have enough of an impact on the financial markets to slightly change mortgage rates. By theory, if consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Forecasts are calling for a reading of 98.9, which would be a decline from November's 99.3. The lower the reading, the better the news it is for bonds and 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... 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.