Rate Lock Advisory

Tuesday, November 29th

Tuesday’s bond market has opened in negative territory as traders prepare for this week’s heavy load of data and other events. Stocks are flat with the Dow down 9 points and the Nasdaq up 7 points. The bond market is currently down 14/32 (3.73%), which should cause this morning’s rates to be approximately .250 - .375 of a discount point higher than Monday’s early pricing. If you saw an intraday revision yesterday afternoon, you likely will see a smaller rise this morning.



30 yr - 3.73%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Consumer Confidence Index

The first event on this week’s busy calendar was November’s Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 100.2 that was a decline from October’s revised 102.2 but pretty much matched expectations. The lower reading means surveyed consumers were less confident about their own finances this month than they were last month. Because waning confidence usually translates into softer consumer spending numbers, we can consider the report to be slightly favorable for mortgage rates.



ADP Employment

Tomorrow has four items that we will be watching, starting with the release of November's ADP Employment report at 8:15 AM ET. It is an employment-related report that tracks changes in private-sector jobs using the company's 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. The markets are expecting to see 200,000 new private-sector payrolls last month. A much smaller number would be considered good news for mortgage rates.



GDP Rev 1 (month after initial)

Also early tomorrow morning will be the release of the first revision to the 3rd Quarter Gross Domestic Product (GDP). Last month's preliminary estimate of a 2.6% annual rate of growth is expected to be revised slightly higher. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the benchmark measurement of economic growth. Good news for rates would be a downward revision, meaning the economy was not as strong as previously thought. However, this data is somewhat aged at this point covering the July, August and September months. That means it will take a noticeable revision to cause a move in rates.



Fed Talk

There are also two afternoon events that may influence rates. Fed Chairman Powell has a speaking engagement at 1:30 PM ET that will draw plenty of attention. Fed members make speeches on a regular basis, many without much fanfare. However, this one comes from Chairman Powell and the topic is titled Economic Outlook, Inflation and the Labor Market. All three are hot-topics for the bond market and mortgage rates. At the very least we will see a minor move in bond prices during his speech. On the other hand, his words could be a significant market mover, especially when those subjects are being discussed.



Fed Beige Book

The second afternoon event will be the Federal Reserve's Beige Book at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region via business contacts. Since the Fed uses this info during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, employment or future activity. If there is a reaction to the report, it will come during mid-afternoon trading.

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.

Washburn Realty

609 Parkview Ln.
Richardson, TX 75080-5509