Rate Lock Advisory

Thursday, August 5th

Thursday’s bond market has opened in negative territory, extending yesterday’s weakness ahead of tomorrow’s key economic data. Stocks are showing early gains, pushing the Dow up 168 points and the Nasdaq up 65 points. The bond market is currently down 8/32 (1.20%), which with yesterday’s selling should cause this morning’s mortgage rates to be higher by approximately .125 - .250 of a discount point. If you saw an afternoon upward revision yesterday, you should see a smaller increase this morning.

8/32

Bonds

30 yr - 1.20%

168

Dow

34,961

NASDAQ

14,846

Mortgage Rate Trend

Trailing 90 Days - National Average

30 Year Fixed
15 Year Fixed
5/1 ARM

Indexes Affecting Rate Lock

Medium

Neutral

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment update was today’s only relevant economic data. It showed 385,000 new claims for benefits were filed last week, down from the previous week’s revised 399,000 initial filings. The week over week decline is a sign the employment sector improved, but the number was still a little higher than expected. Therefore, we can consider the report neutral for bonds and mortgage pricing.

High

Unknown

Employment Situation

Tomorrow brings us the release of the almighty monthly Employment report at 8:30 AM ET. It will give us the U.S. unemployment rate, number of jobs added or lost during the month and average hourly earnings for July. The best scenario for the bond market is rising unemployment, a small increase or loss in jobs and a decline in earnings. Analysts are expecting to see 900,000 new payrolls last month, while the unemployment rate fell to 5.7% from June's 5.9%. Earnings are forecasted to have risen 0.3%. Good news for rates would be a much smaller payroll number, higher unemployment rate and flat earnings.

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.