Rate Lock Advisory

Wednesday, December 11th

Wednesday’s bond market has opened in positive territory, extending gains from late yesterday. Stocks are showing minor gains of 14 points in the Dow and 28 points in the Nasdaq. The bond market is currently up 5/32 (1.82%), which should improve this morning’s mortgage rates slightly.



30 yr - 1.82%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 10-year Treasury Note auction went fairly well with several benchmarks showing a decent level of investor interest in the securities. However, it was not strong enough to cause much of a reaction in bonds after results were posted at 1:00 PM ET. In other words, it ended up being a non-factor for mortgage rates.



Consumer Price Index (CPI)

November's Consumer Price Index (CPI) was posted at 8:30 AM ET, giving us a very important measurement of inflationary pressures at the consumer level of the economy. It showed that the overall reading rose 0.3% while the more important core data rose 0.2%. Both readings were expected to rise 0.2%, meaning the overall was a bit stronger than expected. However, the core data draws the most attention because it excludes more volatile food and energy costs. Since it didn’t show any surprises, we can consider the report neutral for bonds and mortgage rates.



Federal Open Market Committee (FOMC) Statement

This morning’s inflation report was big news, but we have more to watch later today. At 2:00 PM ET today the last FOMC meeting of the year will conclude. There is a wide consensus that the Fed will leave key short-term interest rates unchanged at this meeting. At the same time their post-meeting statement is made, they will also release revised economic projections. They will be followed by a press conference with Chairman Powell at 2:30 PM ET. This meeting may not bring as much anxiety as the past several meetings because there is little chance that they will make a change to rates. Look for the revised economic projections and/or a possible change to their balance sheet to be the cause of a noticeable move in the markets. There is the potential for it to be very active afternoon for mortgage rates, but it is more likely we will see a relatively calm reaction this time.




Look for an update to this report shortly after the markets have an opportunity to react to this afternoon’s Fed events. There is important economic data set for release tomorrow (November Producer Price Index (PPI) along with the 30-year Bond auction), but they will be addressed in this afternoon’s revision.

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.