Rate Lock Advisory

Tuesday, August 14th

Tuesday’s bond market has opened in negative territory with little to drive trading today. There is nothing of importance scheduled today that is likely to affect mortgage rates. Stocks are in positive ground with the Dow up 63 points and the Nasdaq up 14 points. The bond market is currently down 3/32 (2.88%), but I don’t expect to see much change in this morning’s mortgage rates.



30 yr - 2.88%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales

The weeks’ calendar starts tomorrow with three pieces of data scheduled for release. The first will be July's Retail Sales data at 8:30 AM ET. This highly important report comes from the Commerce Department and will give us a measurement of consumer spending. Consumer level spending figures are extremely relevant to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.1% increase in sales. Analysts are also calling for a 0.3% rise in sales if more volatile and costly auto transactions are excluded. Larger than expected increases would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would indicate stronger economic growth.



Productivity and Costs (Quarterly)

Employee Productivity and Costs data for the second quarter will also be released early tomorrow morning. It will give us an indication of employee output per hour. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage rates, but it may influence them slightly during morning trading if the sales data is a dud. Analysts have predicted a 2.0% rise in productivity during the second quarter and a 0.5% increase in labor costs. A sizable increase in productivity and a smaller than expected rise in costs would be favorable news for bonds.



Industrial Production and Capacity Utilization

July's Industrial Production report at 9:15 AM ET that measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.4% increase from June's level. A decline would be considered good news for bonds and mortgage rates because it would indicate manufacturing sector weakness and broader economic growth would be more difficult if manufacturing activity is slipping.

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.