Rate Lock Advisory

Monday, September 20th

Monday’s bond market has opened in positive territory due mostly to significant selling in stocks as the new week begins. The Dow is currently down 488 points while the Nasdaq has lost 260 points. The bond market is currently up 12/32 (1.32%), which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount if compared to Friday’s early pricing.



30 yr - 1.32%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

There is nothing of importance scheduled for release today, the only day of the week without at least one event. We are seeing a flight to safety move in bonds, as investors seek to escape the stock volatility. Stocks appear to be following suit of global markets that are reacting to concerns that a major real estate developer in China is about to default on its debt, likely triggering a snowball effect across other industries that would shine light on the long-term economic impact the pandemic is having on the global economy.




The rest of the week has only four monthly economic releases in addition to a Treasury auction and public speaking engagements by current Fed members. Drawing the most attention will be the FOMC meeting that begins tomorrow and ends Wednesday afternoon.



Housing Starts (New Residential Construction)

August's Housing Starts will start this week’s activities at 8:30 AM ET tomorrow. This report tracks groundbreakings of new home projects but likely will not affect mortgage rates unless it varies greatly from forecasts. Analysts are expecting to see a minor increase in starts of new homes last month, indicating modest growth in the new home part of the housing sector. A stronger housing sector makes broader economic growth more likely, meaning the softer the number of starts in this report, the better the news it is for rates.



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

Also tomorrow is the 20-year Treasury bond auction. Results will be posted at 1:00 PM ET, making this an early afternoon event. A strong demand for the securities could help improve bonds and lead to slightly lower mortgage rates tomorrow afternoon. However, if investor interest in the sale was lackluster, we could see bonds weaken and mortgage rates move higher before the end of the day.



Federal Open Market Committee (FOMC) Statement

Overall, Wednesday is the key day of the week due to the FOMC meeting adjournment, economic projections and press conference. We should see the most movement in rates the middle days of the week, although movement every day is possible, especially if stocks continue to move lower.

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.