Rate Lock Advisory

Friday, August 14th

Friday’s bond market has opened in positive territory following mixed results in today’s economic data. Stocks are showing minor losses with the Dow down 57 points and the Nasdaq down 26 points. The bond market is up 6/32 (0.69%), but weakness late yesterday is going to cause an increase in this morning’s mortgage rates of approximately .125 of a discount point. If you saw an intraday upward revision yesterday afternoon, you likely will see little or no change this morning.



30 yr - 0.69%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales (consumer spending)

The first of this morning’s four economic releases was the highly important Retail Sales report for July. It revealed a 1.2% increase in sales, falling short of the 1.9% that was expected. The headline number means consumers spent less last month than expected, but more than in June. However, a secondary reading that tracks sales excluding more costly and volatile auto transactions came in stronger than expected. These numbers give us mixed indications of how strong consumer spending was last month. Therefore, we are considering the data neutral for mortgage rates.



Productivity and Costs (Quarterly)

Also posted at 8:30 AM ET but with much less significance was the 2nd quarter Employee Productivity and Costs report that showed worker productivity rose at a 7.3% annual rate during the quarter and labor costs rose 12.2%. Both readings were stronger than analysts’ expectations, although, the jump in productivity is good news for bonds. This report isn’t thought of as highly important and it gave us mixed results. Accordingly, we should consider it a non-factor for today’s mortgage pricing.



Industrial Production and Capacity Utilization

July's Industrial Production data at 9:15 AM ET showed that output at U.S. factories, mines and utilities rose 3.0% last month. While that is a sizable increase in this data and shows strength in the manufacturing sector, it matched forecasts so came as no surprise. That has prevented a reaction in the bond market this morning.



University of Michigan Consumer Sentiment (Prelim)

Closing out this week’s busy calendar was the University of Michigan’s Index of Consumer Sentiment for August at 10:00 AM ET. It came in at 72.8, up slightly from July’s 72.5. The slight increase means surveyed consumers felt a tad better about their own financial situations than they did last month. Unfortunately, forecasts showed a small decline in the index, causing us to label this data slightly unfavorable for rates. This is because stronger confidence usually means consumers are more apt to spend money and make large purchases that fuel economic growth.

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.