Our Team Marvin Bush, Sales Associate/Team Leader DRE 01729105 Michelle Garcia, Sales Associate DRE 02101807

Rate Lock Advisory

Thursday, November 5th

Thursday’s bond market has opened in positive territory, driven by strong selling in stocks. The Dow has lost 614 points so far while the Nasdaq is down 952 points after yesterday’s huge rally. The bond market is currently up 6/32 (4.86%), which should improve this morning’s mortgage rates by approximately .250 of a discount point. If you saw an intraday improvement late yesterday as bonds rallied, you may see just a modest improvement this morning.

6/32

Bonds

30 yr - 4.86%

614

Dow

52,741

952

NASDAQ

24,783

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were posted early this morning, revealing 189,000 new claims for jobless benefits were made. This was lower than forecasts of 197,000 and their lowest total since July, which also was the smallest number since 1969. A number that low is a sign the employment sector is holding its own, making the data bad news for the bond market and mortgage rates. Fortunately, the selling in stocks and shift of funds into bonds as a safe-haven are allowing bond traders to ignore this report.

Medium

Positive

Productivity and Costs (Quarterly)

Also released early this morning was the 3rd Quarter Productivity report that indicated worker output rose at a 3.6% annual pace during the July through September months. This was stronger than expectations and a better pace than the second quarter’s revised 2.1%. Furthermore, a secondary labor cost reading that is related to inflation came in well below expectations. Both readings are good news for bonds and mortgage pricing.

High

Unknown

Employment Situation

Tomorrow brings us the release of two economic reports, one of which is considered to be extremely important to the financial and mortgage markets. That release is October’s Employment report that is set to be posted at 8:30 AM ET tomorrow. It is comprised of many statistics and readings about the employment sector, but the ones we will watch the closest are the unemployment rate, the number of new jobs added during the month and average hourly earnings. Current forecasts call for the unemployment rate to have held at September’s 4.2% and an increase in payrolls of 63,000. The third headline number is the average earnings reading that is forecasted to have risen 0.3%. Weaker than expected readings should rally bonds enough to improve mortgage rates noticeably.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

November's preliminary reading of the University of Michigan's Index of Consumer Sentiment is the week's final relevant data, set for release at 10:00 AM ET. The index gives us an indication of consumer willingness to spend by surveying consumers about confidence in their own financial situations. It is expected to be announced at 47.2, down from October's final reading of 48.0. Favorable news for bonds and mortgage rates would be a noticeably lower reading because waning sentiment means consumers are less optimistic about their own financial situations and are less likely to make large purchases in the near future. With consumer spending making up over two-thirds of our economy, any related data is watched closely.

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.

The Bush Team @ Miramar International DRE 01357148

3400 Calloway Drive #700
BAKERSFIELD, CA 93312
Equal Housing OpportunityRealtor MLS
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