Rate Lock Advisory

Friday, November 28th

Friday’s bond market has opened in negative territory again, extending Wednesday’s weakness. Stocks are showing early gains with the Dow up 183 points and the Nasdaq up 72 points. The bond market is currently down 6/32 (4.01%), but this isn’t enough of a move from Wednesday’s close to cause a change in mortgage rates. The financial and mortgage markets were closed yesterday for the Thanksgiving day holiday.

6/32


Bonds


30 yr - 4.01%

183


Dow


47,610

72


NASDAQ


23,267

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Negative


Treasury Auctions (5,7,10,20,30 year)

Wednesday’s 7-year Treasury Note auction didn’t go as well as Tuesday’s 5-year Note sale. The benchmarks pointed to an average demand from investors compared to a fairly strong demand Tuesday. Fortunately, bonds showed little reaction to the 1:00 PM ET results announcement, meaning the weaker sale didn’t have a negative impact on Wednesday afternoon’s rates.

Medium


Neutral


Fed Beige Book

Also late Wednesday was the 2:00 PM ET release of the Federal Reserve's Beige Book. It didn’t give us any big surprises, showing economic activity had changed little since the last update in most of the Fed’s twelve regions. However, half of the districts reported weaker employment conditions, raising further concern about the sector that may cause the Fed to make another rate cut next month. Another key point is that prices remained elevated (inflation) and are restricting consumer spending, which supports the theory the Fed shouldn’t cut rates yet because it could fuel an increase in inflation. In other words, there wasn’t anything significant in the report that likely altered what the Fed will do next month. They are still divided about the best action to take at the upcoming FOMC meeting. Bonds also had little reaction to this report, making it a non0factor for mortgage rates.

Low


Neutral


Holiday Schedule

There are no relevant economic data or other events set for today. We can expect to see thin or light trading in the bond market today since many trading firms are on a skeleton staff with traders home for the extended holiday weekend. Stocks will trade today until 1:00 PM ET while bonds are set to close at 2:00 PM ET. Unless there is a major headline between now and the early close, we should see mortgage rates hold morning levels.

High


Unknown


ISM Index (Institute for Supply Management)

Next week brings us the release of a handful of relevant economic reports, including two that we consider to be highly important. The week will start with the release of November’s manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET Monday. We will also get the Fed’s preferred inflation readings late in the week, but they will be from September. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.


Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419