Rate Lock Advisory

Tuesday, December 2nd

Tuesday’s bond market has opened in negative territory again with little news to drive trading. Stocks are showing early strength with the Dow up 150 points and the Nasdaq up 221 points. The bond market is currently down 5/32 (4.10%), which should keep this morning’s mortgage rates close to Monday’s early pricing.

5/32

Bonds

30 yr - 4.10%

150

Dow

47,439

221

NASDAQ

23,497

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

General Bond Trends

There is no relevant economic data set for release today. We should see a quiet day for rates unless something unexpected happens. We will get more meaningful economic data as the week progresses that should cause mortgage rates to move from this morning’s levels. Favorable results could push the benchmark 10-year Treasury Note yield back closer to 4.00%, leading to lower mortgage rates. On the other hand, stronger than expected economic activity will likely cause an upward move in bond yields and mortgage pricing.

Medium

Unknown

ADP Employment

Tomorrow has three reports set for release that we will be watching, meaning there is a good possibility of seeing a change in mortgage rates. November's private-sector Employment report from payroll processor ADP will begin the day’s activities at 8:15 AM ET. This non-governmental report gives an indication of strength in the private portion of the employment sector. Analysts are expecting it to show 20,000 new jobs were added to the economy last month, down from October’s 42,000. A smaller number, or better yet a decline in jobs, would be considered good news for the bond market and mortgage rates. Another sign of weakness in the sector also could sway the Fed to address softening employment by lowering key rates next month instead of worrying about inflation growth by leaving them unchanged.

Low

Unknown

Industrial Production

The Fed’s Industrial Production report is set for release at 9:15 AM ET tomorrow. It will give us an indication of manufacturing sector strength by gauging output at U.S. factories, mines and utilities. Forecasts are calling for a 0.1% increase in production, hinting at flat manufacturing activity. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is the least influential of the three and is not expected to have a strong impact on rates. The day’s other data is much more likely to drive mortgage rates tomorrow than this report will.

Medium

Unknown

ISM Service Index

November's non-manufacturing index from the Institute for Supply Management (ISM) will be the final release of the day, coming at 10:00 AM ET. This is the sister release to yesterday’s manufacturing index, tracking executive sentiment about business conditions in the service sector instead of manufacturing. It is expected to show a reading of 52.1, down from October's 52.4, signaling fewer surveyed executives felt business improved in the sector than did in October. A lower reading would be favorable news for bonds 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.

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