Rate Lock Advisory

Wednesday, December 3rd

Wednesday’s bond market has opened in positive territory following contradicting economic news. Stocks are mixed with the Dow up 121 points and the Nasdaq down 56 points. The bond market is currently up 8/32 (4.06%), which should improve this morning’s mortgage rates by approximately .250 of a discount point.

8/32

Bonds

30 yr - 4.06%

121

Dow

47,595

56

NASDAQ

23,357

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

ADP Employment

The first of this morning’s three economic reports was the ADP private-sector Employment report at 8:15 AM ET. It showed the economy lost 32,000 private jobs in November, the third month of losses out of the past four, when forecasts had an increase of 20,000 payrolls. November’s data is another sign of weakness in the labor market that strongly supports the Fed cutting key short-term rates again at this month’s FOMC meeting. As a sign of economic weakness, the data is considered favorable for bonds and mortgage rates.

Low

Neutral

Industrial Production

Also released this morning was September’s Industrial Production report that matched expectations of a 0.1% rise in output at U.S. factories, mines and utilities. The modest increase means this part of the manufacturing sector was mostly flat back in September. These results would have little impact on mortgage rates if they were current. The fact that it is aged now and showed no surprises has made the report a non-factor for this morning’s pricing.

Medium

Negative

ISM Service Index

Today’s final economic release was November's non-manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. They announced a reading of 52.6 that indicates surveyed service sector executives were a bit more optimistic about business conditions than they were in October. Analysts were expecting a small decline from October. Since stronger sentiment is a sign of stronger economic activity, the reading is bad news for bonds and mortgage rates. Fortunately, it wasn’t enough of a variance to erase this morning’s earlier bond gains.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Tomorrow’s only relevant data is last week’s unemployment figures at 8:30 AM ET. Analysts are expecting to see 225,000 new claims for jobless benefits were made, up from the previous week’s 216,000 initial filings. Because rising claims are a sign of weakness in the employment sector, good news for bonds and mortgage rates would be a larger than expected number.

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.

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9185 US Highway 19 N
Pinellas Park, FL 33782-5406
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