Rate Lock Advisory

Wednesday, December 12th

Wednesday’s bond market has opened in negative territory with stocks in rally mode. The major stock indexes are showing significant gains, driving the Dow higher by 314 points and the Nasdaq up 120 points. The bond market is currently down 7/32 (2.90%), which should cause this morning’s mortgage rates to be higher than yesterday’s early pricing by approximately .125 - .250 of a discount point.



30 yr - 2.90%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Consumer Price Index (CPI)

November's Consumer Price Index (CPI) was released early this morning, revealing no surprises. It showed that the overall reading was unchanged from October’s level and that the core data (excludes more volatile food and energy prices) rose 0.2%. Both readings pegged expectations and showed that inflationary pressures at the consumer level of the economy are not rapidly rising. While the lack of an upward surprise is good news for bonds and mortgage rates, the fact they met expectations has prevented much of a reaction to the news.



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

We also have a Treasury auction scheduled this afternoon that has the potential to affect mortgage rates. 10-year Notes are being sold today. Results will be posted at 1:00 PM ET today, so any reaction will come during early afternoon trading. This will be followed by tomorrow’s 30-year Bond auction. A strong demand from investors could help boost bonds and lead to a slight improvement in mortgage pricing later today. On the other hand, a lackluster interest may lead to bonds extending this morning’s losses and possibly to an upward revision in rates.



Weekly Unemployment Claims (every Thursday)

Tomorrow has no monthly or quarterly economic data to be concerned with. Besides the 30-year Bond auction, we will also get last week’s unemployment figures. They are expected to show that 231,000 new claims for unemployment benefits were filed last week. Rising claims is a sign of employment sector weakness, so the higher the number tomorrow, the better the news it is for bonds and mortgage rates. However, because this is only a weekly snapshot, don’t expect mortgage rates to have a significant reaction.

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.