Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Unknown

None

Today has nothing scheduled that is expected to affect mortgage rates. The rest of the week has five monthly economic reports set for release, one of which is considered to be highly important, along with a Treasury auction. In addition to the data, we also have an afternoon of Fed events midweek that have the potential to cause a significant move in rates. There is plenty scheduled that will make it a very active week for mortgage rates.

High

Unknown

Retail Sales

Activities begin at 8:30 AM ET tomorrow when August’s Retail Sales report is posted. This is considered to be a highly important release because it tracks consumer spending that makes up over two-thirds of the U.S. economy. If spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably, pushing mortgage rates lower. Current forecasts show a 0.3% increase in sales. Good news for the bond market and mortgage pricing would be a decline.

Medium

Unknown

Industrial Production

Also tomorrow morning, but at 9:15 AM ET, is the release of August’s Industrial Production data. It tracks output at U.S. factories, mines and utilities, giving us a hint of manufacturing sector strength. Analysts are expecting to see no change from July's level, meaning activity was flat last month. A large increase in production would be negative for bonds and mortgage rates as it would be a sign of economic strength. Favorable news for mortgage shoppers would be a decline.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Tomorrow also has a 20-year Treasury Bond auction that may affect rates during early afternoon trading. If the sale is met with a strong demand from investors, particularly international buyers, bond prices may rise and mortgage rates could revise lower after results are announced at 1:00 PM ET. On the other hand, a lackluster interest in the securities may create selling in the broader bond market and lead to a slight upward revision to mortgage rates.

High

Unknown

Federal Open Market Committee (FOMC) Statement

Overall, Wednesday is the most important day of the week for rates due to the afternoon FOMC events. We may also see a sizable change in rates after tomorrow’s sales data is released. The calmest day could be Friday unless a big post-FOMC bond rally or sell-off Thursday afternoon carries into Friday’s morning session. With so much going on this week, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

None

Retail Sales

Industrial Production

Treasury Auctions (5,7,10,20,30 year)

Federal Open Market Committee (FOMC) Statement

Float / Lock Recommendation