Rate Lock Advisory

Tuesday, July 23th

Tuesday’s bond market has opened in negative territory despite favorable economic news. Stocks are showing moderate gains of 72 points in the Dow and 6 points in the Nasdaq. The bond market is currently down 4/32 (2.06%), which with weakness late yesterday should push this morning’s mortgage rates higher by approximately.125 of a discount point.



30 yr - 2.06%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

June's Existing Home Sales report was posted at 10:00 AM ET this morning. The National Association of Realtors announced a 1.7% decline in last month’s home resales. This was weaker than expected, pointing towards a softening housing sector. Because housing sector weakness makes broader economic growth more difficult and bonds tend to thrive in weaker economic conditions, we can consider the data good news for mortgage rates. Unfortunately, yesterday’s late selling carried into this morning’s early trading. Since this data is considered to be only moderately important, it does not have enough significance to offset that early momentum.



New Home Sales

We will get another housing sector release late tomorrow morning when the Commerce Department posts June's New Home Sales report. This data tracks sales of newly constructed homes, but they make up a much smaller portion of the housing sector than existing home sales. Analysts are expecting to see a rise from May's sales, indicating that the new home portion of the housing sector strengthened last month. Favorable news would be a sizable decline in sales.



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

Tomorrow also has the first of this week’s two Treasury auctions that are worth watching. 5-year Notes will be sold tomorrow followed by 7-year Notes Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. On the other hand, strong sales usually make bonds more attractive to investors, bringing more funds into the bond market. The buying of bonds that follows translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours tomorrow and Thursday.

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.