Rate Lock Advisory

Monday, July 15th

Monday’s bond market has opened in positive territory, starting the week with an improvement in rates. Stocks are flat with the Dow down 3 points and the Nasdaq up 3 points. The bond market is currently up 8/32 (2.09%), which with gains late Friday should improve this morning’s mortgage rates by approximately .125 of a discount point. If you saw an improvement Friday afternoon, you will likely see a smaller move in today’s rates.



30 yr - 2.09%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock




There is nothing of importance set to take place today. The rest of the week has six economic reports scheduled that have the potential to influence mortgage rates. Also worth noting is that corporate earnings season has begun. Announcements will be many this week, including Alcoa, which traditionally signals the official start of the season.



Retail Sales

The week’s activities kick off tomorrow with the release of June's Retail Sales report at 8:30 AM ET. This data is considered to be of high importance because it measures consumer level spending. Consumer spending makes up over two-thirds of the U.S. economy, so any related data is watched closely. The Commerce Department is expected to say that sales at retail level establishments rose 0.2% last month. A larger than expected increase in sales will likely cause bond selling and lead to higher mortgage rates since it would mean consumers are spending more than thought. That would point towards economic growth that makes bonds less attractive to investors.



Industrial Production and Capacity Utilization

Also set for release tomorrow is June's Industrial Production data at 9:15 AM ET. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector strengthened slightly during the month. That would basically be bad news for bonds and mortgage rates. However, this report is considered to be only moderately important, so any reaction will be minimal unless there is a wide variance from forecasts.



Corporate Earnings

We will be watching stocks and corporate earnings this week. Alcoa is expected to post theirs after the market closes Wednesday. Therefore, it will have an impact on overnight and early morning trading Thursday. This company isn't necessarily key to gauging economic strength, but it is the first Dow component that posts earnings each quarter. Since it is the first look into Dow-related earnings, it draws plenty of attention in the markets. However, there are plenty of other earnings releases that will also be in the spotlight. Generally speaking, weaker corporate earnings translates into stock selling that makes bonds more attractive to investors. As bond buying pushes prices higher, yields fall and mortgage rates usually track bond yields.




Overall, tomorrow is likely to be the most active day of the week. Although, corporate earnings can heavily drive trading any day. Better than expected earnings would be good for stocks and have a negative impact on bonds. Disappointing earnings should fuel bond buying and lower mortgage rates. With so much going on this week, it looks as though this will be another active week for mortgage rates.

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... 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.

Premier Realty

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