Rate Lock Advisory

Friday, September 30th

Friday’s bond market has opened in negative territory again following mixed economic news. Stocks are helping to pressure bonds with sizable gains in the major indexes. The Dow is currently up 113 points while the Nasdaq has gained 14 points. The bond market is currently down 3/32 (1.56%), but due to strength mid-day yesterday we should see little change in this morning’s mortgage rates if comparing to Thursday’s morning pricing.

3/32


Bonds


30 yr - 1.56%

113


Dow


18,257

14


NASDAQ


5,283

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Positive


Personal Income and Outlays

There were two pieces of economic data posted this morning. The early release was August's Personal Income and Outlays at 8:30 AM ET. It showed a 0.2% rise in income and no change in the spending reading. The income reading pegged forecasts, indicating that consumers had a little more money to spend than they did in July. However, the flat spending was softer than what analysts were expecting to see (up 0.2%). Since consumers spent less than thought, we can consider the data slightly favorable for mortgage rates. Unfortunately, the early stock rally is preventing much of a reaction to this news.

Medium


Negative


University of Michigan Consumer Sentiment (Rev)

Also posted this morning was the University of Michigan's revised Index of Consumer Sentiment for September. It was posted just before 10:00 AM ET and showed that the index rose 91.2, exceeding forecasts of 90.0. This means surveyed consumers were more optimistic about their own financial situations than was expected. Since rising confidence usually translates into stronger levels of consumer spending, this was the bad news in this morning’s economic news.

Low


Neutral


None

Next week doesn’t have a large number of reports scheduled for release, but does have two key releases that are expected to heavily influence the financial and mortgage markets. One of those comes Monday with the release of September’s Institute of Supply Management’s (ISM) manufacturing index. We will address it and the rest of the week’s activities in Sunday evening’s weekly preview.

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.