Wednesday, September 23th
Wednesday’s bond market has opened well in negative territory following unexpected headlines from Iran. Stocks are also showing early losses, but less proportionate than we are seeing in bonds. The Dow is down 69 points while the Nasdaq is down 273 points. The bond market is currently down 20/32 (5.04%), which should cause an increase of approximately .375 - .500 of a discount point in this morning’s mortgage rates.
20/32
Bonds
30 yr - 5.04%
69
Dow
51,793
273
NASDAQ
26,970
Trailing 90 Days - National Average
High
Negative
We don’t have any relevant economic data scheduled for release this morning, but headlines that Iran is stating they are in no hurry to negotiate an ending to the conflict with the U.S. caused oil prices to jump this morning, which had dropped below $100 a barrel with declines the past few sessions. In turn, inflationary concerns come to the forefront in the bond market, pushing the benchmark 10-year Treasury Note auction back above a very important threshold of 5:00%. Unfortunately, this erased the decline in mortgage rates we saw over the last few days.
Low
Unknown
5-year Treasury Notes are being sold today with results set to be posted at 1:00 PM ET. If they indicate investor demand was strong, particularly from international buyers, the broader bond market could move a bit higher, pushing mortgage rates slightly lower. Bad news would be a lackluster interest from investors. However, with geopolitical headlines driving bond trading today, it is highly likely this event will have no impact on this afternoon’s mortgage pricing. We have a similar sale tomorrow when 7-year Notes are being sold. Those results will come at 1:00 PM ET tomorrow.
Medium
Unknown
There are two pieces of economic data set for release at 8:30 AM ET tomorrow morning. First will be last week’s unemployment update that is expected to show 204,000 new claims for jobless benefits were filed, up from the previous week’s 196,000 new filings. Rising claims are a sign the employment sector is weakening. Therefore, good news for mortgage rates would be a much higher number of new claims than predicted.
Low
Unknown
August's New Home Sales report is the second release of the day. It is expected to reveal sales of newly constructed homes rose modestly last month, but this is the least important report in terms of potential impact on mortgage rates in a light week of data. We don't expect the report to have a noticeable impact on mortgage rates unless it differs greatly from forecasts, partly because it covers only a small portion of all home sales in the U.S. A large decline in sales would be favorable for bonds and mortgage rates.
Medium
Unknown
Also tomorrow is the start of the U.S. – China Summit in Washington D.C. where President Trump will host President Xi. Topics are expected to range from trade and tariffs to rare-earth mineral agreements and geopolitical situations such as Taiwan and the Middle East conflict. We will be watching for headlines that may be relevant to mortgage rates.
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.