Rate Lock Advisory

Monday, December 4th

Monday’s bond market has opened in negative territory, taking back some of Friday’s late rally. Stocks are showing sizable losses with the Dow down 132 points and the Nasdaq down 151 points. The bond market is currently down 11/32 (4.24%), but strong gains Friday should still allow this morning’s mortgage rates to be approximately .125 - .250 of a discount point lower. If you saw an intraday improvement Friday, this morning’s pricing will depend on the size of the revision(s) you got before the week ended.



30 yr - 4.24%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Factory Orders

Today’s only relevant economic data was October's Factory Orders report at 10:00 AM ET. It revealed a surprisingly weak 3.6% decline in new orders at U.S. factories for durable and non-durable goods. This was a much larger decline than the 2.6% that was expected. As a sign of manufacturing weakness, we can consider the report good news for bonds and mortgage pricing. The unfortunate part is that a good portion of this data was previously posted in the Durable Goods Orders release, making this report a lower tier release in terms of significance in the markets. In other words, it doesn’t carry enough importance to offset the overnight negative momentum in bonds that carries into this morning’s session.




The rest of the week brings us the release of five more monthly and quarterly economic reports that are likely to have an impact on mortgage pricing, one of which is highly important. The most influential releases are set for the latter days, meaning we should see the largest moves in mortgage pricing those days.



ISM Service Index

November’s non-manufacturing index from the Institute for Supply Management (ISM) will be posted late tomorrow morning. This is the sister release to last week’s manufacturing index, tracking executive sentiment about business conditions in the services sector instead of manufacturing. It is expected to show a reading of 52.4, up from October’s 51.8, signaling more surveyed executives felt business improved in the sector than did in October. As a sign of economic strength, an increase would be bad news for bonds and mortgage rates. Good news would be a much lower reading that would allow bond prices to rise and mortgage rates to move lower.



Employment Situation

Overall, Friday is the most important day of the week due to the significance of the monthly Employment report. Tomorrow and Wednesday may also be active days, while Thursday is the best choice for calmest unless something unexpected happens. With so much scheduled this week after such a strong November rally in bonds it would be prudent to keep an eye on the markets if still floating and closing in the near future.

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.