Rate Lock Advisory

Sunday, October 13th

This holiday-shortened week has only three monthly relevant economic reports scheduled, one of which is extremely important to the financial markets. All of the week’s data will be released over the latter two days, leaving little to driving trading the early days. There are also a large number of Fed-member speaking engagements and corporate earnings releases that could affect bond trading and mortgage rates this week.

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Bonds

Market Closed

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Dow

Market Closed

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NASDAQ

Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Fed Talk

The bond market will be closed tomorrow for the Columbus / Indigenous Peoples’ Holiday. This means there will not be an update to this report. U.S. stock markets will be open for a full trading day though. Despite the holiday, there are several Fed-member speeches scheduled tomorrow, but they won’t affect rates until Tuesday morning. Of particular interest is Fed Governor Christopher Waller’s speech at a conference in California. He is speaking at 3:00 PM ET, with a topic of Economic Outlook.

High

Unknown

Retail Sales

First on the calendar is the highly influential Retail Sales data at 8:30 AM ET Thursday that measures consumer spending. It is so important to the markets because retail-level spending makes up over two-thirds of the U.S. economy. If spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably, pushing mortgage rates lower. Current forecasts show a 0.3% increase in sales. Good news for the bond market and mortgage pricing would be a decline.

Medium

Unknown

Industrial Production

Next up is September's Industrial Production data at 9:15 AM ET, also Thursday morning. This release will give us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting to see a 0.1% decline from August's level, meaning that manufacturing activity slightly softer last month. A large increase in production would be negative for bonds and mortgage rates as it would be a sign of economic strength. A larger decline would be favorable for mortgage shoppers.

Low

Unknown

Housing Starts (New Home Construction)

September's Housing Starts will close out this week’s economic calendar at 8:30 AM ET Friday. This Commerce Department report will probably not have a heavy impact on the bond market or mortgage rates. It gives us a sign of housing sector strength and future mortgage credit demand by tracking new home groundbreakings. However, it is considered to be of low importance to the financial and mortgage markets. Analysts are expecting it to show little change in new home starts between August and September. Due to the lack of market importance, we need to see a significant surprise in this data for it to have a noticeable influence on Friday’s mortgage rates.

Medium

Unknown

Corporate Earnings

Also worth noting is corporate earnings season gets into full swing this week, when a large number of big-named companies release their quarterly and annual earnings reports. Strong earnings are good news for stocks and bad news for bonds. Generally speaking, if earnings miss expectations, bonds should rally and mortgage rates should move slightly lower. With a number of well-known large companies posting this week, stocks could also have a heavy influence on bond trading and possibly mortgage pricing.

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Unknown

none

Overall, Thursday is likely to be the most active day for rates due to the importance of the Retail Sales report. Wednesday is a good candidate for calmest day. While rates may still be active this week, we probably will not see the same amount of movement and intraday revisions as we saw last week. That said, it would be prudent to keep an eye on the markets if floating an interest rate and closing in the near future.

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.

Net Equity Financial Mortgage

2267 Langhorne-Yardley Road
Langhorne, PA 19047
Equal Housing Opportunity
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