Rate Lock Advisory

Wednesday, September 23th

Wednesday’s bond market has opened fairly flat with little to drive trading so far. Stocks are mixed again with the Dow up 19 points and the Nasdaq down 84 points. The bond market is currently down 1/32 (0.67%), which should keep this morning’s mortgage rates nearly unchanged from Tuesday’s morning pricing.



30 yr - 0.67%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Talk

Fed Chairman Powell’s testimony yesterday before congress didn’t reveal any big surprises. He and Treasury Secretary Mnuchin appeared before the House Financial Services Committee yesterday as part of the Coronavirus Aid Act. He reiterated that the Fed will do whatever it takes to support the economy and that while the economy has improved significantly from a few months ago, there also is a great deal of uncertainty ahead due to the pandemic. They also took the opportunity to remind congress that more aid to consumers can shorten the negative impact on the economy. Bonds and mortgage rates had little reaction to the testimony. They both will appear before the Senate Banking Committee tomorrow morning for the same topic.



COVID-19 Matters

There was no relevant economic data released this morning, but there are still two events taking place today that we will be watching. The first is day two of three consecutive days of congressional appearances by Chairman Powell. Today’s appearance will be before a House of Representatives subcommittee looking into the country’s response to the coronavirus earlier this year. This event appears to be more political than financial. However, the markets always listen when he is talking. It is not a given that we will see a major reaction to his appearance today, but the possibility does exist.



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

We also have the first of this week’s two potentially influential Treasury auctions taking place today. The Treasury will sell 5-year Notes today followed by 7-year Notes tomorrow. These sales will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher and mortgage rates may improve slightly. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction will come during afternoon trading today and/or tomorrow.



New Home Sales

Besides weekly unemployment figures, Chairman Powell’s Senate testimony and the second auction, we also will get August’s New Home Sales report tomorrow. The Commerce Department is expected to say at 10:00 AM ET that sales of newly constructed homes rose last month, indicating the new home portion of the housing sector strengthened. This report will likely not have a noticeable impact on mortgage rates unless it differs greatly from forecasts. It is the week's least important report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that yesterday’s Existing Home Sales report did not.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.