Rate Lock Advisory

Monday, August 4th

Monday’s bond market has opened fairly flat, holding on to Friday’s post-Employment report rally. Stocks are starting the week with strong gains of 433 points in the Dow and 324 points in the Nasdaq. The bond market is currently up 1/32 (4.21%), but gains Friday afternoon should push this morning’s mortgage rates lower than Friday’s early pricing by approximately .125 of a discount point.

1/32

Bonds

30 yr - 4.21%

433

Dow

44,022

324

NASDAQ

20,975

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

Factory Orders

June's Factory Orders report was posted late this morning, revealing a 4.8% drop in new orders at U.S. factories for durable and non-durable goods. This was slightly stronger than the 5.0% decline that was expected, but well within the median range of forecasts. A large headline decline was expected because of the big jump in May’s orders. Therefore, we are labeling the report neutral for mortgage rates.

Medium

Unknown

Fed Talk

The rest of the week has two more relevant monthly or quarterly economic reports set to be released, along with a couple of Treasury auctions midweek that could be the most influential events of the week since neither of the remaining reports are key or highly influential like some of last week’s data was. In addition to the data, there are also quite a few Fed-member speeches coming this week and some high-profile corporate earnings announcements that may have an impact on the markets.

Medium

Unknown

ISM Service Index

Tomorrow’s sole report will come from the Institute for Supply Management (ISM) at 10:00 AM ET, who will post their non-manufacturing index (aka service index) for July. This is the sister report of last Friday's ISM manufacturing index with this version tracking executive opinions on business conditions in the service sector rather than manufacturing. It is expected to show a reading of 51.2, up from June's 50.8. A reading above 50.0 means more surveyed executives felt business improved during the month than those who said it worsened. Good news for mortgage rates would be a much weaker than predicted reading, following suit of last week's manufacturing index.

Medium

Unknown

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

Overall, tomorrow’s ISM report or Wednesday’s auction results may make either of those days the most active for mortgage rates. Friday is a good candidate for calmest day with no data scheduled. It is safe to assume that we will see minor or moderate moves in rates multiple days this week, but we shouldn’t have a day like last Friday unless something unexpected happens. That said, if you are still floating an interest rate and closing in the near future, it would be wise to keep an eye on the markets as they may get active without notice.

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.

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