Rate Lock Advisory

Tuesday, December 1st

Tuesday’s bond market has opened well in negative territory, erasing yesterday’s afternoon rally. Stocks are showing strong gains during early trading and likely are contributing to this morning’s pressure in bonds. The Dow is currently up 357 points while the Nasdaq has gained 112 points. The bond market is currently down 16/32 (0.89%), but strength late Monday should help keep this morning’s mortgage rates close to yesterday’s early pricing. Many lenders revised rates lower intraday as bonds rallied yesterday afternoon, meaning if you saw a change before closing, you likely will see an increase this morning by the same amount.



30 yr - 0.89%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Talk

Fed Chairman Powell and Treasury Secretary Mnuchin are speaking to the Senate Banking Committee this morning as part of the Coronavirus Aid Act. The markets listen carefully anytime Chairman Powell speaks publicly, especially during congressional testimony. That means this event has the potential to be a market-mover, causing noticeable volatility in the financial and mortgage markets. If there is a reaction to something they say, expect it to come sometime between now and noon ET. They will do the same before the House Financial Services committee again tomorrow morning.



ISM Index (Institute for Supply Management)

This morning’s big economic release was the release of November's Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET. It came in at 57.5, down from October’s 59.3 and softer than forecasts. The lower reading indicates fewer surveyed manufacturing executives felt business improved during the month than did last month. That is a sign of a slowing manufacturing sector, making the data good news for bonds and mortgage rates. Unfortunately, the negative tone during overnight trading that extended into this morning’s session was too strong to offset this favorable data.



ADP Employment

Tomorrow brings us the release of November's ADP Employment report at 8:15 AM ET. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers since it tracks changes in private-sector jobs. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. Analysts are expecting to see 400,000 new private-sector payrolls last month. A weaker number would be good news for mortgage rates.



Fed Beige Book

The Federal Reserve's Beige Book will be released at 2:00 PM ET tomorrow afternoon This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region through business contacts. Since the Fed uses this info during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

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.