Rate Lock Advisory

Thursday, December 14th

Thursday’s bond market has opened in negative territory, giving back yesterday’s post-FOMC gains. The major stock indexes are showing minor gains of 50 points in the Dow and 11 points in the Nasdaq. The bond market is currently down 10/32 (2.38%), but we still should see a slight improvement in this morning’s mortgage rates due to strength late yesterday. If your lender improved rates before the end of the day Wednesday, then you should see an increase in this morning’s rates.



30 yr - 2.38%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales

Both of this morning’s economic releases gave us unfavorable results, helping to fuel the early selling. The big news was November’s Retail sales report that showed a 0.8% jump in consumer spending. That was well above the 0.3% that was forecasted, meaning consumers spent much more last month than many had thought. Even a secondary reading that excludes more costly and volatile auto transactions came in much stronger than expected (+1.0% vs +0.6%). And if that wasn’t enough, October’s sales figures were revised higher by 0.3%. Because consumer spending makes up a significant portion of the U.S. economy, today’s readings are clearly negative for the bond market and mortgage rates.



Weekly Unemployment Claims (every Thursday)

The second release of the morning was last week's unemployment figures, also at 8:30 AM ET. They showed that 225,000 new claims for unemployment benefits were filed last week. That was a decline from the previous week’s 236,000 initial filings and lower than the 239,000 that was expected. Because declining claims points to a stronger employment sector, this was also bad news for mortgage pricing.



Industrial Production and Capacity Utilization

Tomorrow has a single moderately important economic report for the markets to digest. November's Industrial Production data will be posted at 9:15 AM ET tomorrow. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are calling for a 0.3% rise in output, indicating modest manufacturing sector strength. A decline would be good news for bonds, while a stronger reading would show manufacturing strength and be considered bad news for rates.

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.