Rate Lock Advisory

Tuesday, September 27th

Tuesday’s bond market initially opened well in positive territory, looking like we would be recovering a big part of yesterday’s heavy sell-off. However, shortly before posting this report, bonds soured and erased hope of seeing that recovery in this morning’s pricing. Stocks are showing early gains with the Dow up 181 points and the Nasdaq up 118 points. The bond market is currently down 6/32 (2.95%), which with yesterday’s afternoon sell-off is going to cause this morning’s rates to be approximately .500 - .625 of a discount point higher than Monday’s early pricing. If you saw an intraday upward revision yesterday, you should see a smaller increase this morning.

6/32


Bonds


30 yr - 3.95%

181


Dow


29,441

118


NASDAQ


10,921

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Positive


Durable Goods Orders

The first of this morning’s three economic reports was August's Durable Goods Orders at 8:30 AM ET. It showed that new orders for products such as airplanes, electronics and appliances slipped 0.2% last month when forecasts were calling for a 0.1% decline. A secondary reading that excludes orders for larger airplane and other transportation products also came in slightly softer than expectations. The headline numbers are good news for bonds and rates because they show weaker manufacturing activity. However, this data is known to be volatile from month to month, so the slight variance in today’s report is not nearly as meaningful as it would have been in other reports. In fact, we saw bonds well in positive ground before this data was released.

Medium


Negative


Consumer Confidence Index

September's Consumer Confidence Index (CCI) was posted at 10:00 AM ET this morning with the Conference Board announcing a reading of 108.0. This reading was an increase from August’s revised 103.6 and higher than the 104.3 that was predicted. The increase signals surveyed consumers felt better about their own finances this month than they did last month. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we have to label this report as unfavorable for mortgage rates.

Low


Negative


New Home Sales

Today’s final economic report was August's New Home Sales data that revealed sales of newly constructed homes spiked 28.8% last month, greatly exceeding forecasts. This was a surprisingly strong report, especially considering analysts were expecting to see a decline in sales. Even though this data carries relatively low importance to the markets, the sizable variance from forecasts is having a negative impact on this morning’s trading.

Medium


Unknown


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

We also have the first of this week's two potentially influential Treasury auctions to watch this afternoon. The Treasury is selling 5-year Notes today and 7-year Notes tomorrow. 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.

Medium


Unknown


Fed Talk

Tomorrow doesn’t have any relevant economic reports set for release, but there are five Fed member speaking engagements taking place. One of them is by Fed Chairman Powell 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. The other four are scheduled throughout the day, so we may see a reaction in the markets at any time.

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.


Bridgeview Mortgage Corp.

1200 Hempstead Turnpike
Franklin Square, NY 11010