Rate Lock Advisory

Tuesday, October 7th

Tuesday’s bond market has opened flat with little in terms of relevant headlines to drive trading. Stocks are also calm with the Dow down 12 points and the Nasdaq up 29 points. The bond market is currently up 1/32 (4.14%), which should keep this morning’s mortgage rates close to Monday’s early pricing.

1/32

Bonds

30 yr - 4.14%

12

Dow

46,682

29

NASDAQ

22,970

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Unknown

Fed Talk

Today’s only activities that we will be watching are a handful of Fed speeches throughout the day. None of them are targeted as likely to cause a big move in the markets or affect mortgage rates, but with nothing else scheduled today, it wouldn’t take much of a surprise comment to draw a reaction in the markets.

Medium

Unknown

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

Tomorrow also lacks a relevant economic release, but there are two afternoon events that are not affected by the government shutdown. First will be the results announcement of tomorrow’s 10-year Treasury Note auction at 1:00 PM ET. These types of auctions don't directly impact rates, but they do influence broader bond market sentiment by giving an indication for interest in long-term debt. This is pertinent to the mortgage market because rates are based on long-term mortgage securities. If there is a decent demand from investors, we should see strength in bonds during afternoon trading. However, a weak sale- particularly a lack of international buyers, may cause rates to move higher by the end of the day tomorrow.

Medium

Unknown

FOMC Meeting Minutes

Next up will be the 2:00 PM release of the minutes from last month's FOMC meeting. These may move the markets or could be a non-factor, depending on what they show. One key point traders are looking for is how many more rate cuts the Fed will make over the next few meetings, especially at the remaining two of this year. The general consensus is that they will make a quarter-point reduction at both of those meetings, but that was before important data was shelved because of the shutdown. It is worth noting though, the last FOMC meeting was followed by revised economic predictions and a press conference with Fed Chair Powell. This means the likelihood of seeing a significant surprise in the minutes is relatively low.

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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

RTC Mortgage Corporation

1000 N. Coast Highway, #7
Laguna Beach, CA 92651
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NMLS: 288939 BRE: 01117142



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