Rate Lock Advisory

Friday, July 29th

Friday’s bond market has opened in positive territory following the release of a much weaker than forecasted key economic reading. Stocks are reacting negatively to the news with the Dow down 80 points and the Nasdaq down 9 points. The bond market is currently up 6/32 (1.48%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 1.48%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 7-year Treasury Note auction went better than Tuesday’s 5-year Note sale. Several benchmarks that we use to gauge investor demand in the securities showed above average interest. That is fairly good news for the broader bond market, but failed to have much of an impact on afternoon trading yesterday.



Gross Domestic Product (GDP)

The first of this morning’s three economic releases was the most important of the group and one of the key pieces of data we regularly see. The preliminary reading of the 2nd Quarter Gross Domestic Product (GDP) showed that the economy grew at a 1.2% annual rate during the 2nd quarter, falling well short of expectations. Analysts were predicting a 2.6% rate of growth, meaning the economy was not nearly as strong during the April through June months as thought. It is also worth noting that the 1st Quarter GDP was revised downward 0.3% to a 0.8% annual rate. These readings are very good news for bonds and mortgage rates because bonds are more appealing to investors and tend to thrive during weaker economic conditions. The news should also make a Fed rate hike in September less likely.



Employment Cost Index (Quarterly)

Also early this morning was the release of the 2nd Quarter Employment Cost Index (ECI) that tracks employer costs for wages and benefits. It revealed a 0.6% increase, pegging forecasts. This is a minor release compared to the highly influential GDP, so we have not seen this news have an impact on today’s trading.



University of Michigan Consumer Sentiment (Rev)

The final report of the week was July's revised University of Michigan Index of Consumer Sentiment just before 10:00 AM ET. It came in at 90.0, slightly higher than the preliminary reading of 89.5 from earlier this month. That means surveyed consumers are a little more optimistic about their own financial and employment situations than previously estimated. Regardless, it was close to forecasts and has not affected this morning’s mortgage rates.




Next week is another active one with relevant data scheduled for release each day. The week starts off with the very important ISM manufacturing index Monday and closes with the almighty monthly Employment report Friday. There are also several releases in between those two particular reports. Look for details on next week’s calendar 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.