Rate Lock Advisory

Friday, January 28th

Friday’s bond market has opened flat following mixed economic data and early stock losses. The Dow is currently down 296 points while the Nasdaq has lost 65 points. The bond market is nearly unchanged from Thursday’s close (1.80%), which should keep this morning’s mortgage rates close to yesterday’s early pricing.



30 yr - 1.80%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 7-year Treasury Note auction was uneventful. Investor demand for the securities was average compared to other recent sales. Bonds had little reaction once the results were posted at 1:00 PM, meaning the auction was a non-factor for mortgage rates.



Personal Income and Outlays

December's Personal Income and Outlays data started this morning’s batch of economic data. It showed that consumer income rose 0.3% last month while spending fell 0.6%. The income reading was weaker than expected (0.5%), but spending matched expectations. Also in the report is the Fed’s preferred core PCE index for gauging inflation that rose 0.5%, slightly more than forecasts. These readings are a little good and a little bad, causing us to label the report as neutral to slightly negative for mortgage rates.



Employment Cost Index (Quarterly)

The 4th Quarter Employment Cost Index (ECI) showed a 1.0% rise, meaning employer costs for wages and benefits rose somewhat rapidly during the last three months of the year. However, it was actually a little softer than forecasts, meaning we can label the release as neutral to slightly favorable for rates.



Univ of Mich Consumer Sentiment (Rev)

Closing out this week’s calendar was January’s revised University of Michigan’s Index of Consumer Sentiment at 10:00 AM ET. It came in at 67.2, the lowest since November 2011 and down from the preliminary reading of 68.8 from two weeks ago. Declining confidence is a sign that consumers are likely to spend less in the immediate future, limiting economic growth. That allows us to consider the data favorable for bonds and mortgage rates.




Next week takes us to the new month’s reports that include a couple of highly important releases. They include the ISM manufacturing index (first business day of the month) and the almighty Employment report (first Friday) in addition to a few moderately important reports. We have seen quite a bit of volatility in the markets and mortgage pricing over the past couple weeks. It appears likely that we will have another week of the same due to the importance of the scheduled data. There is nothing of importance set for Monday. Look for details on all of next 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.

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