Rate Lock Advisory

Monday, December 8th

Monday’s bond market has opened in negative territory, extending the recent upward momentum in yields. Stocks are starting the week mixed with the Dow down 119 points and the Nasdaq up 21 points. The bond market is currently down 11/32 (4.17%), which with Friday’s late weakness should cause an increase of approximately .250 of a discount point in this morning’s mortgage rates if compared to Friday’s early pricing. If you saw an upward revision Friday afternoon, you likely will see another of about the same size this morning.

11/32

Bonds

30 yr - 4.17%

119

Dow

47,835

21

NASDAQ

23,599

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

General Bond Trends

There is no relevant economic data set for release today. This morning’s early bond selling looks to be a result of a continuation of Friday’s afternoon weakness and concerns about what the Fed may say Wednesday in an otherwise light calendar. It doesn’t appear any weekend news headlines are influencing trading this morning.

High

Unknown

Federal Open Market Committee (FOMC) Statement

We have only one quarterly economic report scheduled and the Thursday morning weekly unemployment update for the markets to digest the rest of the week. The markets will be primarily focused on the Fed’s FOMC meeting midweek. In addition to the minor economic releases, there also are two Treasury auctions that may affect mortgage rates during afternoon trading two days.

Medium

Unknown

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

The first of two relevant Treasury auctions takes place tomorrow when 10-year Treasury Notes will be sold. 30-year Bonds will be sold Thursday. Results of each sale will be posted at 1:00 PM ET on their auctions day, making them early afternoon events. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements in mortgage pricing during afternoon hours tomorrow and/or Thursday. On the other hand, a weak interest in the auctions could lead to upward revisions to rates.

---

Unknown

none

Overall, Wednesday is clearly the most important day of the week for rates due to the FOMC meeting and related events. The calmest day for rates will likely be Friday, assuming something unexpected doesn’t happen. We are expecting to see a very active week for the bond market, leading to plenty of movement in mortgage rates. Accordingly, please proceed cautiously if still floating an interest rate since we could see them end the week far from this morning’s opening levels.

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.

Crown Mortgage

2019 Woodbrook Court Suite 5
Charlottesville, VA 22901
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