Rate Lock Advisory

Tuesday, September 28th

Tuesday’s bond market has opened well in negative territory despite favorable economic data and heavy selling in stocks. The Dow is currently down 346 points while the Nasdaq has lost 300 points. The bond market is down 16/32 (1.54%), which should push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point.



30 yr - 1.54%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 5-year Treasury Note auction went pretty well with the benchmarks showing an average level of demand for the securities. The bond market and mortgage rates had little reaction to the results. We have 7-year Notes being sold today. If investor interest in the securities is strong, we may see the bond market improve after results are posted at 1:00 PM ET.



Consumer Confidence Index (Conference Board)

September's Consumer Confidence Index (CCI) was posted at 10:00 AM ET. The Conference Board announced a reading of 109.3 that fell well short of expectations, indicating surveyed consumers did not feel as comfortable with their own financial and employment situations as thought. The reading was also a decline from August’s number, showing declining confidence. This is favorable news for bonds and rates because waning confidence usually translates into softer consumer spending levels.



Fed Talk

Also taking place today is Fed Chairman Powell’s testimony to Congress as part of the Coronavirus CARES Act. Traders will be watching his words for any surprises even though last week’s FOMC events and his speaking engagement Friday should have given us as current information as possible.




This morning’s bond losses have little to do with either of this morning’s events. Selling in Treasuries started overnight in international markets and carried into this morning’s session. It is part of the overall negative momentum in the market at this time.



Bond Trends

Tomorrow has nothing of importance scheduled, which could be troublesome for rates. We really need to see some weaker economic data to stop this upward trend in bond yields and mortgage rates. The last time we saw the 10-year Treasury Note yield at its current level was three months ago. There is a bit of resistance at the point it is now, but a failure to retreat back lower makes 1.61% a real possibility in the near future. Since mortgage rates tend to track bond yields, this would be bad news for mortgage shoppers. A day without the opportunity to get weaker data is a day for yields to move a little higher.

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.

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