Rate Lock Advisory

Tuesday, January 18th

Tuesday’s bond market has opened in negative territory following overnight selling that has extended into the morning session. Stocks are also in selling mode with the Dow down 500 points and the Nasdaq down 180 points. The bond market is currently down 13/32 (1.83%), causing another increase of approximately .375 of a discount point if compared to Friday’s early pricing. If you saw an intraday increase Friday before closing, you should see a smaller increase in this morning’s pricing. The markets were closed yesterday in observance of the Martin Luther King Jr. holiday.

13/32


Bonds


30 yr - 1.83%

500


Dow


35,411

180


NASDAQ


14,719

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Neutral


None

There is nothing of importance scheduled for today. The rest of the week has only three relevant monthly economic reports for the markets to digest in addition to a Treasury auction that may come into play.

Low


Unknown


Housing Starts (New Home Construction)

Activities start early tomorrow morning when December's Housing Starts report is posted at 8:30 AM ET. It will tell us how many new home groundbreakings took place during the month. While this data gives us a small indication of housing sector strength, it is not known to be highly influential on mortgage rates. Accordingly, it will take a large variance from forecasts for the report to have a direct impact on mortgage pricing. Forecasts show a decline in new home sales. A large drop in sales would be considered favorable.

Medium


Unknown


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

Tomorrow also has the 20-year Treasury Note auction taking place. These sales show what type of demand investors have for long-term securities. If demand is strong in the sale, particularly from international buyers, we could see the broader bond market improve after results are posted at 1:00 PM ET. On the other hand, lackluster interest in the securities may lead to an upward revision to rates before the end of the day.

Medium


Unknown


Corporate Earnings

Corporate earnings season picks up momentum this week, meaning we may see more stock volatility any day. As big-named companies report their results, stocks should react accordingly. Stronger than expected earnings will likely boost stocks and hurt bond prices, pushing mortgage rates higher. Disappointing results could lead to lower mortgage rates. With little economic data or other events scheduled this week to drive trading, stocks may end up having the strongest effect on rates some days.

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.


Excel Funding Real Estate Services, Inc.

28924 South Western Avenue, Suite 110
Rancho Palos Verdes, CA 90275