Rate Lock Advisory

Wednesday, February 1st

Wednesday’s bond market has opened up slightly following mostly favorable economic headlines. Stocks are reacting negatively to the data, pushing the Dow lower by 225 points and the Nasdaq down 18 points. The bond market is currently up 3/32 (3.50%), which should keep this morning’s mortgage rates close to Tuesday’s early pricing.



30 yr - 3.50%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



ADP Employment

The first of this morning’s economic releases was January’s ADP Employment report at 8:15 AM ET. It showed that only 106,000 new private-sector payrolls were added last month, falling well short of the 165,000 that was predicted. As a sign of weaker than thought conditions in the employment sector, we can label the report favorable for bonds and mortgage rates. However, it is important to remember this data isn’t often accurate in predicting what Friday’s extremely influential monthly governmental Employment report will show. In other words, this is good news today, but we should remain cautious about Friday’s version.



ISM Service Index

One of this week’s major economic releases was the Institute of Supply Management’s (ISM) manufacturing index at 10:00 AM ET. They announced a 47.4 reading, pointing towards slower manufacturing activity. The markets were expecting to see 48.0, making the report good news for bonds and mortgage rates. Unfortunately, we are not seeing the strong reaction to the headline that we expected, preventing a more visible influence on rates. It is highly likely that traders are waiting for this afternoon’s events before reacting to the data.



Federal Open Market Committee (FOMC) Statement

We have the 2:00 PM ET FOMC meeting adjournment and press conference to watch this afternoon. There is a strong consensus that the Fed will raise key short-term interest rates a quarter-point this week in their effort to help bring down inflation. A move of that size would be the smallest since they began raising rates last March. Traders will be looking at the post-meeting statement for clarification of the Fed's future plans, particularly regarding when they may stop the rate hikes. Many analysts feel that they will pause the increases after this meeting to see how much of an impact their previous moves have had on inflation. They don’t want to overtighten, contributing to a possible economic recession. A press conference will take place at 2:30 PM, but this meeting does not include revised economic projections. There is a good possibility of seeing afternoon volatility in the markets this afternoon.



Factory Orders

Tomorrow has a few minor economic releases scheduled. They will be addressed in this afternoon’s post-FOMC update to this report.

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.