Rate Lock Advisory

Wednesday, September 22th

Wednesday’s bond market has opened up slightly following weaker than expected housing data. Stocks are rallying with the Dow up 309 points and the Nasdaq up 76 points. The bond market is currently up 2/32 (1.32%), which should keep this morning’s mortgage rates close to Tuesday’s early pricing.

2/32


Bonds


30 yr - 1.32%

309


Dow


34,229

76


NASDAQ


14,822

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Positive


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

Yesterday’s 20-year Treasury bond auction went pretty well with the benchmarks showing a decent level of interest in the securities. Bonds responded favorably after results were posted at 1:00 PM ET, but not enough to cause an intraday change to mortgage rates.

Medium


Positive


Existing Home Sales from National Assoc of Realtors

August's Existing Home Sales data was posted at 10:00 AM ET this morning. The National Association of Realtors announced a 2.0% decline in home resales last month. That was a tad larger of a decline than forecasts, hinting the housing sector may be slowing. This is good news for bonds and mortgage rates because a slowing housing sector makes broader economic growth more difficult.

High


Unknown


Federal Open Market Committee (FOMC) Statement

We have a few Fed events taking place this afternoon that may heavily influence the markets and mortgage rates. We could see a significant move in mortgage rates after this afternoon’s activities. We may get very bad news that drives rates higher or good news that fuels a bond rally. Therefore, proceed cautiously if still floating an interest rate and closing in the near future.

High


Unknown


Federal Open Market Committee (FOMC) Statement

They start with the adjournment of this week’s FOMC meeting at 2:00 PM ET that is unlikely to yield a change in key short-term rates. Investors will be looking at verbiage in the post-meeting statement for the Fed’s thoughts or plans for controlling inflation, tapering of their monthly bond purchases and when the Fed may start raising key short-term interest rates.

High


Unknown


Misc Fed

Also at 2:00 PM ET will be the release of their revised economic projections for the U.S. Key readings the markets will be looking for are the unemployment rate, inflation and overall GDP growth. Downward revisions by the Fed will be good news for bonds and mortgage pricing. They will be followed by a press conference with Chairman Powell at 2:30 PM ET. Analysts and market traders will be watching his words carefully.

Medium


Unknown


None

Tomorrow has a couple of minor economic releases set to be posted, but they are not likely to cause a significant move in the financial or mortgage markets. Look for details on tomorrow’s activities in this afternoon’s update that will be posted shortly after the markets have an opportunity to react to today’s Fed events.

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.


Milestone Mortgage, Inc. NMLS#136714

7168 Graham Road Suite 175
Indianapolis, IN 46250-2683