Rate Lock Advisory

Wednesday, October 15th

Wednesday’s bond market has opened in positive territory despite no morning data and an early stock rally. The Dow and Nasdaq are both posting sizable gains of 397 points and 303 points respectively. The bond market is currently up 4/32 (4.01%), which should improve this morning’s mortgage rates by approximately .125 of a discount point. If you saw an intraday improvement yesterday afternoon, you will probably see little change this morning.

4/32

Bonds

30 yr - 4.01%

397

Dow

46,687

303

NASDAQ

22,825

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Unknown

Fed Talk

There are several Fed-member speaking engagements happening today, most scheduled around the lunch or early afternoon hours. None of them are expected to cause any waves in the markets and are likely to have no impact on mortgage rates. Fed Governor Waller has a speech tomorrow morning in New York that has a topic listed as Economic Outlook that may draw a reaction.

Medium

Unknown

Fed Beige Book

The Federal Reserve's Beige Book is set for release at 2:00 PM ET today. It is named simply after the color of its cover, but summarizes economic activity through the eyes of business contacts within each Fed region. Chairman Powell and friends rely heavily on its contents during their FOMC meetings to make monetary policy decisions, so look for a potential reaction during mid-afternoon trading. It probably will not cause a big sell-off in the stock or bond markets, but the release is still worth watching as it could draw enough of a reaction to change rates if it reveals any major changes since the last update.

High

Unknown

General Bond Trends

This week’s bond movement has the benchmark 10-year Treasury Note yield testing 4.00% again. This has been a pretty strong resistance level, having not broken below it in over a year. Each time it has come close, bonds go into selling mode, driving yields and mortgage rates higher. It is hard to imagine that it will break below that threshold and hold when there are no major economic reports being released. Still, it is something to watch. If it breaks below that level, we could see a downward trend in yields and mortgage rates begin. On the other hand, failing to move below 4.00% could mean yields and rates are set to make a move higher.

Medium

Neutral

Corporate Earnings

The ongoing government shutdown will prevent the release of some highly important data that was scheduled for release tomorrow, leaving little to drive trading. We haven’t seen any big swings as a result of surprise corporate earnings announcements, at least not yet. With such a light week, we expected some of those earnings releases to have a bigger impact on the markets, and possibly mortgage pricing.

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... 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.

Excel Funding Real Estate Services, Inc.

28924 South Western Avenue, Suite 110
Rancho Palos Verdes, CA 90275
Equal Housing Opportunity
DRE #01194971 / NMLS #330182
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