Rate Lock Advisory

Friday, September 13th

Friday’s bond market has opened in negative territory following stronger than expected consumer spending news. The major stock indexes are mixed with the Dow up 42 points and the Nasdaq down 8 points. The bond market is currently 15/32 (1.83%), which should push this morning’s mortgage rates higher by approximately .250 of a discount if comparing to Thursday’s early pricing. If you saw an intraday increase late yesterday as the morning gains disappeared, you shouldn’t see as large of a rise this morning.



30 yr - 1.83%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales

The Commerce Department gave us August’s Retail Sales data early this morning, reporting a 0.4% increase in consumer spending. That was stronger than the 0.2% that expected. Because consumer spending makes up almost 70% of the U.S. economy, the stronger reading makes the data bad news for bonds and mortgage rates. The size of the reaction in bonds is somewhat surprising since a secondary reading that excludes more volatile auto transactions came in lower than expected. Still, this is considered to be a major piece of economic data, so the headline number is apparently driving trading.



University of Michigan Consumer Sentiment (Prelim)

Also posted this morning was the University of Michigan’s Index of Consumer Sentiment for September. It came in at 92.0, exceeding forecasts of 90.2 and up from August’s final reading. The increase means more surveyed consumers felt better about their own financial situations than did last month. Rising confidence in their own financial and employment situations means consumers are more likely to spend money, fueling economic growth. Therefore, we should consider this data to be bad news for rates too.




Next week does not have any major economic data for the markets to digest. Most of what is scheduled is housing related. However, we do have the FOMC meeting taking place mid-week. There is much debate about what the Fed will do (or not do) at this meeting. That elevates the possibility of seeing significant volatility after it adjourns. This meeting also includes revised Fed economic projections and a press conference. Look for details on 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... 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.