Rate Lock Advisory

Friday, October 7th

Friday’s bond market has opened in negative ground following stronger than expected employment news. Stocks are reacting with strong losses also, pushing the Dow down 522 points and the Nasdaq down 307 points. The bond market is currently down 17/32 (3.89%), which should cause an increase of approximately .375 - .500 of a discount point if compared to Thursday’s early pricing.



30 yr - 3.89%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Employment Situation

Today’s big economic news was the release of the September's Employment report. It revealed that the U.S. unemployment rate fell 0.2% to 3.5% and 263,000 new jobs were added to the economy. The change in the unemployment rate was not expected and the job number exceeded forecasts of 250,000 by a small margin. Both readings show strength in the employment sector, making them bad news for bonds and mortgage rates.



Inflation News

Another key reading in the report was average hourly earnings that came in with a 0.3% increase. Since rising wages fuels inflationary pressures, it is watched closely by bond traders. The increase matched forecasts, making it neutral for bonds and mortgage pricing.



Consumer Price Index (CPI)

Next week’s activities include the release of two important inflation indexes (CPI & PPI), a highly relevant consumer spending report, a couple of Treasury auctions and the minutes from the most recent FOMC meeting. If you recall, it was August’s CPI that caused havoc in bonds and led to a huge sell-off that caused mortgage rates to spike higher. Analysts will be looking for any sign of the Fed’s aggressive rate increases this year to start having an impact on inflation.



Holiday Schedule

The bond market will be closed Monday for the Columbus Day / Indigenous Peoples Day holiday, but stocks will be open for full trading. The most important events are taking place mid-week. Look for details on all of next week’s calendar 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.