Rate Lock Advisory

Tuesday, December 18th

Tuesday’s bond market has opened in positive territory despite strong gains in stocks and no significant economic news to drive trading. The major stock indexes are in rally mode with the Dow up 266 points and the Nasdaq up 58 points. The bond market is currently up 3/32 (2.84%), which should improve this morning’s mortgage rates by approximately .125 of a discount point from Monday’s early pricing.



30 yr - 2.84%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Housing Starts (New Residential Construction)

Today’s only relevant economic data was November's Housing Starts at 8:30 AM ET. The Commerce Department announced an increase in new home groundbreakings that exceeded expectations. That would indicate the new home portion of the housing sector was stronger than thought. However, the report includes multi-family (apartments) and single-family home starts. The stronger in the report came from the multi-family starts and not single-family homes that the mortgage market is more interested in. That allows us to rate the data neutral for mortgage rates rather than negative.



Existing Home Sales from National Assoc of Realtors

Tomorrow is the big day of the week, starting with November’s Existing Home Sales figures at 10:00 AM ET. The National Association of Realtors is expected to announce a small decline in home resales last month, indicating more housing sector weakness. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual sales figures vary greatly from forecasts, the results will probably have a minor impact on rates.



Federal Open Market Committee (FOMC) Statement

What the markets will be focused on comes during afternoon trading. The two-day FOMC meeting that began today will adjourn at 2:00 PM ET tomorrow. There is a wide consensus that Fed Chairman Powell and friends will make a quarter point upward bump to key short-term interest rates. At the same time their post-meeting statement is made, they will also release revised economic projections. That will be followed by a press conference with Chairman Powell at 2:30 PM ET. What is uncertain is if the Fed’s plans for hikes next year has changed. It is expected that this topic will be addressed one way or another. Accordingly, expect a very active afternoon in the financial and mortgage markets tomorrow.

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.