Rate Lock Advisory

Tuesday, July 27th

Tuesday’s bond market has opened well in positive territory, due to overnight gains and favorable economic news. Stocks are helping the cause also with early weakness that has the Dow down 165 points and the Nasdaq down 132 points. The bond market is currently up 16/32 (1.24%), but selling late in the day yesterday should keep this morning’s mortgage rates at Monday’s early levels. If you saw an increase before closing yesterday, you should see an improvement of the same amount this morning.



30 yr - 1.24%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Durable Goods Orders

This morning’s release of June's Durable Goods Orders report revealed a 0.8% increase in new orders for big-ticket products at U.S. factories, falling short of the 2.1% rise that was expected. A secondary reading that excludes more costly and volatile transportation-related orders, such as airplanes, also came in well below expectations. These readings hint manufacturing activity may not have been as strong as thought, making them good news for bonds and mortgage rates.



Consumer Confidence Index (Conference Board)

Also posted this morning was July’s Consumer Confidence Index (CCI). The Conference Board announced a 129.1 reading that was higher than forecasts and up a bit from June’s revised 128.9. The stronger than expected reading means surveyed consumers felt better about their own financial and employment situations than analysts had thought. Since rising confidence usually translates into higher levels of consumer spending, we can consider this index to be negative for bonds and mortgage rates. Fortunately, the morning’s earlier release carries more significance in the markets than this report does, allowing bonds to rally.



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

We also have an afternoon event to watch that may cause a slight revision to mortgage pricing. That will be the 5-year Treasury Note auction and its’ 1:00 PM ET results. If investor demand for the securities was strong, we may see strength in the broader bond market and a possible intraday improvement to rates. Bad news would be a lackluster interest that has the potential to cause an increase in rates during early afternoon trading.



Federal Open Market Committee (FOMC) Statement

Tomorrow doesn’t have any relevant economic data scheduled for release, but we do have the afternoon adjournment of this week’s FOMC meeting. While there will be a press conference with Fed Chairman Powell, this meeting does not include revised economic projections. There is virtually no possibility of the Fed changing key short-term interest rates at this meeting. What the markets will be looking for is an indication of what Chairman Powell and friends are considering doing in the future to control inflation and keep the economy growing. Of particular attention will be talk of tapering their current bond buying program. How the financial and mortgage markets react will depend on what the post-meeting statement shows. The meeting adjournment and statement release will occur at 2:00 PM ET and the press conference will start at 2:30 PM ET tomorrow.

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.

Beacon Financial Resource Group, Inc.

14510 SW 77 Court
Palmetto Bay, FL 33158