Rate Lock Advisory

Thursday, August 16th

Thursday’s bond market has opened in negative territory with stocks posting strong gains during early trading. The Dow is up 340 points while the Nasdaq has gained 47 points. The bond market is currently down 4/32 (2.87%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.



30 yr - 2.87%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Housing Starts (New Residential Construction)

July's Housing Starts was one of this morning’s two 8:30 AM ET economic releases. The Commerce Department announced a 0.9% rise in new home groundbreakings, falling well short of expectations. A downward revision to June’s starts means new home construction was weaker than in expected the last two months. While that is good news for bonds and mortgage rates, the report itself does not carry a high level of importance. Therefore, we haven’t seen a noticeable reaction to the news.



Weekly Unemployment Claims (every Thursday)

The second release was last week’s unemployment figures that showed 212,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week’s revised total of 214,000 initial filings and softer than the 217,000 that was forecasted. The lower reading is a sign that the employment sector strengthened last week when many had thought it weakened. That said, this is only a weekly report, so it has had little impact on today’s mortgage rates.



Leading Economic Indicators (LEI) from the Conference Board

Tomorrow brings us the release of two moderately important reports, both at 10:00 AM ET. The Conference Board is a New York-based business research group that will post its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it would be predicting that the economy may be strengthening more than thought. However, a weaker reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases economic growth concerns in the bond market and could lead to slightly lower mortgage rates. It is expected to show an increase of 0.5% in the index, indicating moderate economic growth over the next couple of months. It will take a sizable difference between forecasts and its actual reading for this report to noticeably influence mortgage rates.



University of Michigan Consumer Sentiment (Prelim)

The last release of the week will come from the University of Michigan when they post their Index of Consumer Sentiment for August. It will give us an indication of consumer confidence, which projects consumer willingness to spend. If a consumer's confidence in their own financial and employment situation is rising, they are more apt to make large purchases in the near future. But, if they are growing more concerned about their job security or finances, they probably will delay making that large purchase. This influences future consumer spending data and therefore, impacts the financial markets. It is expected to show a reading of 97.8 that would mean confidence was nearly unchanged from July's level of 97.9. Good news for mortgage rates would be a decline.

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.