Weekly Rate Lock Advisory



Monday’s bond market has opened in negative territory due to early stock strength. The stock markets are kicking the week off well into positive ground, with the Dow up 131 points and the Nasdaq up 30 points. The bond market is currently down 16/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point over Friday’s morning pricing.

There is no relevant economic data scheduled for release today. The rest of the week brings us the release of four relevant reports for the bond market to watch in addition to two relatively important Treasury auctions and a Fed conference.

July’s New Home Sales data is the first report of the week, coming late tomorrow morning. This report is the least important release of the week. It will give us another indication of housing sector strength and mortgage credit demand, but only tracks approximately 15% of all home sales. It usually doesn’t have a major impact on bond prices or mortgage rates unless it varies greatly from forecasts. Current forecasts are calling for little change between June’s and July’s sales of newly constructed homes.

Overall, we will likely see the most activity in rates Wednesday, but Friday is also relatively important. Stronger than expected results in the economic reports and disappointing results in the Treasury sales will most likely lead to rates moving higher this week. Trading late last week hints that mortgage rates may have bottomed out for the time being. Accordingly, proceed cautiously if still floating an interest rate.

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.