Rate Lock Advisory

Wednesday, February 4th

Wednesday’s bond market has opened slightly in negative territory yet again following unfavorable economic news and a mixed open in stocks. The Dow is up 99 points while the Nasdaq is down 198 points. The bond market is currently down 1/32 (4.27%), which should keep this morning’s mortgage rates close to Tuesday’s early pricing.

1/32

Bonds

30 yr - 4.27%

99

Dow

49,340

198

NASDAQ

23.058

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

ADP Employment

January’s ADP Employment report was released at 8:15 AM ET this morning, revealing the private sector added fewer jobs than expected last month. The 22,000 new payrolls fell short of the 42,000 that were forecasted, hinting the employment sector may be a little softer than many had thought, especially considering December’s number was revised from the 41,000 that was previously announced to 37,000. These numbers can be labeled good news for bonds and mortgage rates since they show a slowing labor market.

Medium

Neutral

ISM Service Index

The Institute for Supply Management announced their January non-manufacturing index (aka service index) stood at 53.8 last month, matching December’s downwardly revised reading. The revision tells us that the service sector was weaker than expected in December and pretty much as predicted to start the new year. If you want to see negative results in this report (good news for rates), you can say December was weaker than previously thought and that there was no growth in the sector during December and January. However, we are labeling the report neutral for mortgage rates since the reading came in as expected.

Medium

Unknown

Fed Talk

There is also a Fed-member speech taking place this evening that has a topic related to monetary policy and the outlook for the U.S. economy. Fed Governor Cook will be speaking at the Economic Club of Miami at 6:30 PM ET, meaning if there is a reaction to something she says, it won’t be until tomorrow morning’s mortgage rates. This very well could be a non-factor for the markets, but it is one of the two speeches we flagged as more likely to affect rates than most of this week’s other speaking events.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Tomorrow’s only relevant data is the weekly unemployment update at 8:30 AM ET. It is expected to show 212,000 new claims for unemployment benefits were filed last week. That would be an increase from the previous week’s 209,000 initial filings. Rising claims are a sign of weakness in the employment sector. Therefore, the higher the number, the better the news for rates.

Low

Positive

Government Shutdown

Congress has passed the legislation needed to end the partial government shutdown and President Trump has signed it. This means all government workers will be returning to their positions. A new release date for January’s Employment report has not been announced yet after Friday’s scheduled release was postponed, but we should see it in the near future. Late next week is a realistic estimate for the report to be posted since the Bureau of Labor Statistics (BLS) was closed only a few days.

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.

Amity Mortgage LLC

Your friends in the mortgage business.

185 Meadow St
Naugatuck, CT 06770
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