Rate Lock Advisory

Tuesday, August 3rd

Tuesday’s bond market has opened in positive territory despite stronger than forecasted economic news. Stocks are showing early losses of 60 points in the Dow and 46 points in the Nasdaq. The bond market is currently up 5/32 (1.16%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 1.16%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Factory Orders

June's Factory Orders data was posted late this morning, revealing a 1.5% increase in new combined orders at U.S. factories for durable and non-durable goods. This was stronger than the 0.9% rise that was expected, making the news a negative for mortgage rates. However, this report is considered to be low-to-moderately important, preventing it from having a noticeable impact on this morning’s pricing.



Bond Trends

Bonds are obviously not reacting to this morning’s economic data. It appears the recent positive momentum is still in place. Although, in my opinion, it appears to be losing steam. Don’t be surprised to see some pressure ahead of Friday’s key Employment report, especially if tomorrow’s related data shows unfavorable results.



ADP Employment

Tomorrow morning brings us July's ADP Employment report before the markets open. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs, using their payroll processing clients as a base. 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. Forecasts show 675,000 payrolls were added back to the economy. The bond and mortgage markets would prefer to see a smaller increase.

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... 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.