Rate Lock Advisory

Friday, October 30th

Friday’s bond market has opened in negative territory following stronger than expected economic data. Stocks are also in negative territory with the Dow down 99 points and the Nasdaq down 144 points. The bond market is currently down 4/32 (0.84%), which should push this morning’s mortgage rates higher by ,125 of a discount point compared to Thursday’s early pricing.



30 yr - 0.84%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Personal Income and Outlays

The first of this morning’s three economic releases was September's Personal Income and Outlays report at 8:30 AM ET. It showed that income rose 0.9% while spending increased 1.4%. Both readings exceeded expectations of 0.3% and 1.0% respectively, indicating consumers had more money to spend than thought and did spend it. Because those increases are a sign of stronger economic activity, they are bad news for bonds and mortgage rates. However, a key inflation reading that the Fed relies on during their FOMC meetings matched forecasts. It is that reading that may be helping to boost bonds during early trading.



Employment Cost Index (Quarterly)

Also at 8:30 AM ET was the release of the 3rd Quarter Employment Cost Index (ECI). It revealed a 0.5% increase, falling short of the 0.6% that was forecasted. We can consider this bit of data favorable for bonds and mortgage pricing because it points towards lower costs for wages and benefits, which eases inflation concerns.



University of Michigan Consumer Sentiment (Rev)

The final report of the day was the University of Michigan’s revised Index of Consumer Sentiment for October. They announced a reading of 81.8 that was up from the preliminary reading and slightly higher than expected. This means surveyed consumers felt better about their own financial situations than previously thought. Rising confidence usually translated into higher levels of consumer spending. Therefore, we should consider the data slightly negative for rates.




Next week has several big events scheduled, starting with the ISM manufacturing index late Monday morning and closing with the almighty monthly Employment report Friday. In between there are a couple of moderately important economic reports, an FOMC meeting and of course the Presidential election. 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... Float 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.