Rate Lock Advisory

Friday, August 19th

Friday’s bond market has opened well in negative territory, extending overnight selling that was fueled by international inflation news. Stocks are also showing losses of 224 points in the Dow and 204 points in the Nasdaq. The bond market is currently down 12/32 (2.97%) to push the benchmark 10-year Treasury Note yield back near the 3.00% threshold. This is going to cause an increase in this morning’s mortgage rates of approximately .375 of a discount point.

23/32

Bonds

30 yr - 2.97%

224

Dow

33,774

204

NASDAQ

12,760

Mortgage Rate Trend

Trailing 90 Days - National Average

30 Year Fixed
15 Year Fixed
5/1 ARM

Indexes Affecting Rate Lock

Medium

Negative

Inflation News

There is nothing scheduled for release today that is relevant to mortgage rates. Today’s early weakness in bonds looks to be attributed to economic data from Japan and Germany that raised inflation alarms across the global markets. While many believe inflation has peaked here in the U.S., there are still concerns about the impact it is having on the global economy. Hence, the negative reaction here in the U.S. when there is little else today to drive trading.

Medium

Unknown

None

Next week doesn’t have a lot on its calendar but there is enough to cause some volatility in bonds and mortgage rates, particularly the latter days. Monday has nothing scheduled that we need to be concerned with. We will get an important manufacturing index and the first revision to the 2nd quarter Gross Domestic Product (GDP) reading midweek. The annual Jackson Hole central banker conference in Wyoming will start Thursday and could yield some headlines that heavily affect the markets. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.