Rate Lock Advisory

Monday, December 5th

Monday’s bond market has opened well in negative territory, taking back Friday’s afternoon recovery. Stocks are also showing losses, pushing the Dow lower by 282 points and the Nasdaq down 106 points. The bond market is currently down 26/32 (3.58%), which should bring mortgage rates back to Friday’s morning levels.



30 yr - 3.58%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Factory Orders

October's Factory Orders report was posted at 10:00 AM ET. The Commerce Department announced a 1.0% rise in new orders at U.S. factories. This was more than the 0.7% that was expected, meaning manufacturing activity was stronger than thought. As a sign of economic strength, this is bad news for the bond and mortgage rates.



Productivity and Costs (Quarterly)

There is nothing of importance scheduled for tomorrow. Next up is revised 3rd Quarter Productivity numbers Wednesday at 8:30 AM ET. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for bonds. It is the conditions surrounding an expanding economy, such as rising inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for a 0.3% rise in productivity, matching the initial estimate. The stronger the reading, the better the news for the bond market. This report generally does not have a noticeable impact on mortgage pricing though, so it will take a wide variance to draw much attention.




Overall, Friday looked to be the key day of the week for rates, but this morning’s sell-off may be hard to top. The calmest day will probably be tomorrow unless something unexpected happens. Despite the few economic reports and other events to drive trading, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future. As we are seeing today, they can get active without warning.

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.