Rate Lock Advisory

Sunday, September 25th

This week brings us six monthly and quarterly economic reports that have the potential to affect rates. There are also a couple of Treasury auctions that may come into play during afternoon hours midweek and some Fed speeches that traders will watch. After the benchmark 10-year Treasury Note yield touched its highest level since 2010 Thursday, we saw strength late Friday. Hopefully that will extend into tomorrow’s session, allowing mortgage rates to start the week on a favorable note since there is nothing scheduled to drive trading.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Unknown


Durable Goods Orders

August's Durable Goods Orders will start this week's activities at 8:30 AM ET Tuesday morning. It gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Big-ticket products are items that are expected to last three or more years such as airplanes, electronics and appliances. Analysts are expecting to see a 0.6% decline in new orders, pointing towards weakness in the manufacturing sector. A larger decline should help boost bond prices and cause mortgage rates to drop because signs of economic weakness eases inflation fears and makes longer-term securities more appealing to investors. However, an unexpected increase in new orders will likely help push mortgage rates higher. It is worth noting that this data is known to be quite volatile from month-to-month, so a small variance from forecasts may not affect mortgage pricing like it would in other reports.

Medium


Unknown


Consumer Confidence Index

September's Consumer Confidence Index (CCI) will be posted at 10:00 AM ET Tuesday morning. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a rise in confidence from August's reading, meaning surveyed consumers were more optimistic about their own financial situations than last month. Rising confidence is thought to raise the possibility consumers will make a large purchase in the near future. Because consumer spending makes up almost 70% of the U.S. economy, good news for rates would be a decline. Analysts are calling for a reading of approximately 104.3, up from August's 103.2. The smaller the reading, the better the news for the bond market and mortgage rates.

Low


Unknown


New Home Sales

Tuesday’s third piece of data will be August's New Home Sales report. The Commerce Department is expected to say at 10:00 AM ET that sales of newly constructed homes fell last month, but this report will likely not have a noticeable impact on mortgage rates unless it differs greatly from forecasts. It is the week's least important report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that last week's Existing Home Sales report did not.

Medium


Unknown


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

We also have the first of this week's two potentially influential Treasury auctions taking place Tuesday. The Treasury will sell 5-year Notes Tuesday and 7-year Notes Wednesday. They will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction will come during afternoon trading Tuesday and/or Wednesday.

Medium


Unknown


Fed Talk

Wednesday doesn’t have any relevant economic reports set for release. There are Fed member speaking engagements taking place throughout the week that may draw a reaction. Fed Chairman Powell has one scheduled for Wednesday morning at 10:15 AM ET. He is due to make the opening remarks at a community bank conference in Missouri. While his appearances are always watched closely, this event is being done via a pre-recorded message that prevents him from taking any questions. It also minimizes the possibility of him saying something that will move the markets. His appearance is on our calendar, but there is just a small chance it will cause a noticeable move in mortgage pricing.

Low


Unknown


GDP Rev 2 (month after Rev 1)

Next up will be the second revision to the 2nd Quarter Gross Domestic Product (GDP) early Thursday. Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this update having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced in the U.S. and is considered to be the best gauge of economic activity. Thursday's update is expected to show that the economy contracted at an annual rate of 0.6%, unchanged from last month's estimate. A significant downward revision would be considered favorable news for rates.

High


Unknown


Personal Income and Outlays

Friday brings us the final two reports that will draw attention from traders. The first is August's Personal Income and Outlays at 8:30 AM ET that gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up such a large part of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. That is negative news for mortgage rates because bonds tend to thrive in weaker economic conditions. Forecasts are calling for a 0.3% rise in income and a 0.2% rise in spending. If we see weaker than expected readings, the bond market should react positively, leading to lower mortgage rates Friday. This report also includes the PCE index that the Fed primarily uses for gauging inflation. A surprise in it can also lead to a move in mortgage pricing.

Medium


Unknown


Univ of Mich Consumer Sentiment (Rev)

Closing out this week’s calendar will be the University of Michigan's revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed a 59.5 reading. Analysts are expecting to see no change, meaning consumer confidence was as strong as previously thought. Waning confidence is good news for bonds because consumers that are concerned about their own financial and employment situations are less likely to make a large purchase in the near future, limiting economic growth. Therefore, a lower than expected reading would be favorable news for rates.

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Unknown


none

Overall, the most important day for rates is either Tuesday or Friday. Both have multiple reports scheduled that carry elevated importance and can move rates noticeably. No day stands out as a clear candidate for calmest day since there is so much going on. We can expect to see an active week for rates, so keep an eye on the markets if still floating an interest rate and closing in the near future.

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.


Home Pointe Mortgage Company

3235 Shallowford Rd. NE,
Chamblee , Georgia 30341