Rate Lock Advisory

Monday, July 20th

Monday’s bond market has opened in negative territory due almost exclusively to weekend war news and an upward move in gas prices. Stocks are starting the week mixed with the Dow down 108 points and the Nasdaq up 114 points. The bond market is currently down 9/32 (4.58%), which should push this morning’s mortgage rates higher than Friday’s early pricing by approximately .250 of a discount point.

9/32

Bonds

30 yr - 4.58%

105

Dow

52,038

114

NASDAQ

25,634

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

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

There is nothing of importance scheduled for release today. In fact, the rest of the week has only one monthly economic report for the markets to digest and a Treasury auction midweek that may affect rates during afternoon trading. There are also plenty of corporate earnings releases each day that have the potential to indirectly influence rates slightly.

Medium

Negative

Iran War Headlines

We are seeing headlines from the Middle East drive this morning’s bond trading. They include deaths of U.S. servicemen and higher gas prices at the pump as a result of escalating military action going back and forth this past weekend. There are concerns that the war will continue to escalate and oil/gas prices will rise again, fueling inflation concerns that hurt bond prices and lead to higher mortgage rates.

Low

Unknown

Corporate Earnings

Corporate earnings are set for release every day this week. They include a large number of companies, including some big names, posting results this week. Generally speaking, good news for stocks is bad news for bonds and mortgage rates. If the general consensus is disappointing earnings and/or forward guidance, stocks will likely move lower, creating an opportunity for investors move funds into bonds. Under this scenario, bond prices will rise and their yields will decline. That would be good news for mortgage shoppers because mortgage rates tend to track bond yields.

---

Unknown

none

Overall, no day stands out as a good candidate for most important day for mortgage rates because of the extremely light calendar. We should see rates remain a bit calmer than last week because none of the events on this week’s calendar are considered to be highly important. There is nothing scheduled for tomorrow either, again leaving geopolitical news to have a heavy influence on bond trading and mortgage pricing.

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

38 W Main Street
Carmel, IN 46032
Equal Housing Lender
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