Rate Lock Advisory

Monday, November 3rd

Monday’s bond market has opened in negative territory despite favorable results in this morning’s economic release. Stocks are mixed with the Dow down 148 points and the Nasdaq up 134 points. The bond market is currently down 7/32 (4.10%), which should cause an increase in this morning’s mortgage rates of approximately .125 - .250 of a discount if compared to Friday’s early pricing.

7/32

Bonds

30 yr - 4.10%

148

Dow

47,414

134

NASDAQ

23,859

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Positive

ISM Index (Institute for Supply Management)

The Institute for Supply Management (ISM) gave us their October manufacturing index late this morning. They announced a reading of 48.7 that fell short of forecasts (49.4) and a decline from September’s 49.1. This is good news because the month over month declines means surveyed manufacturing executives felt business was better in September than last month. Slowing manufacturing activity is a sign of economic weakness that makes bonds more appealing to investors. Unfortunately, traders are looking beyond this report, extending Friday afternoon’s weakness in bonds.

Medium

Unknown

Fed Talk

Now that the FOMC meeting is behind us, the Fed speaking calendar is heating up. This week has many speeches scheduled, but two particular stand out above the others. Fed Governor Lisa Cook is speaking today at 2:00 PM ET in Washington D.C. with a topic listed as Economic Outlook and Monetary Policy. Another happens early tomorrow morning when Vice Chair for Supervision Michelle Bowman speaks in Madrid, Spain. After Chairman Powell’s comments last week that undercut the theory another rate cut was almost a sure thing at the December FOMC meeting, bond traders will be watching closely for any hints about the Fed’s next move.

High

Unknown

ADP Employment

Overall, there are three more monthly economic reports coming this week. Wednesday looks to be the most important day for mortgage rates due to the elevated importance level the ADP private-sector employment report is likely to have and the ISM services index both set for release. The calmest day may be Thursday unless something unexpected happens. Possible culprits include a surprise Fed comment from one of the many speeches happening this week or stock influences from the large number of corporate earnings announcements scheduled. It would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future because they may get active without notice.

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... Lock 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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