Rate Lock Advisory

Friday, December 12th

Friday’s bond market has opened in negative territory, erasing the post-FOMC rally between yesterday’s late selling and this morning’s early losses. Stocks are mixed yet again with the Dow up 42 points and the Nasdaq down 179 points. The bond market is currently down 8/32 (4.18%). This should cause an increase of approximately .250 - .375 of a discount point in this morning’s rates if compared to Thursday’s early pricing. Some lenders issued an intraday increase in rates late yesterday, so the size of this morning’s change depends on the size of the revision you saw yesterday afternoon.

8/32


Bonds


30 yr - 4.18%

42


Dow


48,746

179


NASDAQ


23.414

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Neutral


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

Yesterday’s 30-year Treasury Bond auction drew mixed results. Some of the benchmarks we use to gauge investor appetite for the securities indicated a solid investor demand compared to last month’s auction, but in line with an average of the six preceding sales. There was a modest drop in bidding from international investors, which falls in the negative column, even though overall bidding was fairly strong. It appears the most noticeable part of yesterday’s afternoon bond weakness began about an hour after results were announced at 1:00 PM ET. This means that while the auction results may have contributed to the afternoon increase in rates, they weren’t the core reason for it.

Low


Unknown


Fed Talk

We don’t have any relevant economic data coming today that is expected to affect bond trading or mortgage pricing. The only thing that appears to have the potential to cause a change in rates are a few Fed-member speeches scheduled. Now that the FOMC meeting is behind us, so is the Fed’s mandatory quiet period. Most of these speeches are about mundane topics such as financial regulation or payment systems. However, some have topics listed that are related to monetary policy or economic outlook. That said, market traders will be listening for hints about the Fed’s future monetary policy moves.

High


Unknown


Employment Situation

Next week looks to be fairly busy with relevant economic releases and other events that may have an impact on rates. Included in them are a couple of highly important economic reports such as the long-delayed Employment report and Consumer Price Index (CPI) that can be extremely influential on the financial and mortgage markets. There also is another Treasury auction midweek. Monday has none of the data scheduled but there are two more Fed speeches that we will be watching. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.


Thomas-Chambers Company
BRE # 01208644

449 W MacArthur Blvd.
Oakland, CA 94609