Rate Lock Advisory

Thursday, December 8th

Thursday’s bond market has opened well in negative territory, erasing yesterday’s gains and then some. Stocks are showing early strength with the Dow up 244 points and the Nasdaq up 93 points. The bond market is currently down 16/32 (3.47%), which will push this morning’s mortgage rates higher than yesterday’s early pricing by approximately .250 of a discount point. If you saw an intraday improvement before closing Wednesday, you will likely see a larger increase this morning than those who did not get a revision.



30 yr - 3.47%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Weekly Unemployment Claims (every Thursday)

This morning’s sole economic release was last week’s unemployment figures. They showed that 230,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised 226,000 initial filings. Rising claims is a sign of employment sector weakness. Therefore, we can label this release good news for bonds and mortgage rates. However, since it is just a weekly snapshot and the variance from forecasts was fairly minimal, we have seen little reaction to the data.



Producer Price Index (PPI)

Tomorrow brings us this week’s most important economic data with two morning reports. November's Producer Price Index (PPI) will give us an indication of inflationary pressures at the producer or manufacturing level of the economy at 8:30 AM ET. There are two portions of the index that are used- the overall reading and the core data. If it reveals stronger than expected readings, showing that inflationary pressures are stronger than thought, the bond market should react negatively. That would drive mortgage rates higher. If we see in-line or weaker than expected numbers, we can expect the bond market to respond by pushing mortgage rates lower. Forecasts are calling for a 0.2% increase in both the overall and core readings. The core reading will draw more attention because it excludes more volatile food and energy costs.



Univ of Mich Consumer Sentiment (Prelim)

The final report of the week will be the release of December's preliminary reading to the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. Tomorrow's release is expected to show a reading of 57.0, which would be a slight increase from last month's final reading of 56.8. A large decline in confidence would be favorable news for rates.

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... Lock 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.