Rate Lock Advisory

Wednesday, November 25th

Wednesday’s bond market has opened in positive territory after this morning’s group of economic releases tilted favorably for bonds. Stocks are also helping to boost bonds with the Dow down 194 points and the Nasdaq down 2 points. The bond market is currently up 7/32 (0.86%), which should allow this morning’s mortgage rates to be slightly lower than Tuesday’s early pricing.



30 yr - 0.86%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Weekly Unemployment Claims (every Thursday)

This extremely busy morning started with the release of last week’s unemployment figures at 8:30 AM ET. They showed that 778,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised 748,000. That signals the employment sector weakened last week, making the data good news for bonds and mortgage rates.



Durable Goods Orders

Next up early this morning was October's Durable Goods Orders report that showed new orders for big-ticket items such as airplanes, appliances and electronics rose 1.3% last month. That was stronger than the 0.9% that was expected, indicating the manufacturing sector was doing better than thought last month. Even a secondary reading that excludes more costly and volatile airplane orders and related equipment came in above forecasts. Because those readings are a sign of economic strength, we should consider them bad news for bonds and mortgage rates.



GDP Rev 1 (month after initial)

The first revision to the 3rd Quarter Gross Domestic Product (GDP) reading was this morning’s third economic release. As expected, the economy rebounded at an annual rate of 33.1% during the July through September months, matching the initial estimate. The lack of a noticeable revision upward or downward has allowed the markets to ignore this news as it is a little aged at this point and less relevant than the current quarter’s activity.



Personal Income and Outlays

The 10:00 AM batch of releases started with October's Personal Income and Outlays report that revealed a 0.7% decline in income and a 0.5% increase in spending. The income was much weaker than expected, which is good news for bonds and mortgage rates because consumers had less money to spend. Spending outpaced forecasts, making that portion of the report bad news. An inflation reading in the data that the Fed relies heavily on came in unchanged compared to a small increase that analysts were expecting. Therefore, we can consider the report neutral to slightly favorable for bonds and mortgage pricing.



New Home Sales

October’s New Home Sales data indicated a slight decline in purchases of newly constructed homes. However, the decline is due to a sizable upward revision to September’s sales. The number of sales still exceeded forecasts, pointing towards a stronger new home portion of the housing sector. Fortunately for rates, this report is considered to be of low importance to the markets since it tracks such a small portion of all home sales in the U.S.



University of Michigan Consumer Sentiment (Rev)

Closing this week’s calendar was November’s revised University of Michigan Index of Consumer Sentiment. It came in at 76.9, nearly unchanged from the initial estimate of 77.0. This release tracks consumer sentiment in their own financial situations, giving us an indication of consumer willingness to spend. The slight revision wasn’t enough for the data to have an impact on today’s rates.



Federal Open Market Committee (FOMC) Minutes

We also have the 2:00 PM ET release of the minutes from the last FOMC meeting that may affect mortgage rates. Traders will be looking for any indication of the Fed's next move regarding monetary policy from discussion of the participating members. These minutes will show what economic concerns members have about the pandemic, lack of another stimulus package and what they feel the near future holds. If there is a reaction, it will come during mid-afternoon trading. They may lead to afternoon volatility, or they may be a non-factor. Because they do carry the potential to influence mortgage rates, they should be watched.



Holiday Schedule

The financial markets will be closed tomorrow in observance of the Thanksgiving Day holiday. There will not be an early close today, but the stock and bond markets will close early Friday and reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home for the long weekend.




We would like to wish everyone a very happy and safe Thanksgiving holiday!

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.