Rate Lock Advisory

Wednesday, December 19th

Wednesday’s bond market has opened flat as traders await this afternoon’s events. Stocks are showing solid gains during trading, pushing the Dow up 206 points and the Nasdaq up 70 points. The bond market is nearly unchanged from yesterday’s close (2.82%), but we still should see an improvement in this morning’s mortgage rates of approximately .125 of a discount point due to strength late yesterday. Many lenders improved pricing before closing yesterday, so if yours did revise lower you should see little change in this morning’s rates.



30 yr - 2.82%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

November’s Existing Home Sales report was posted at 10:00 AM ET this morning. The National Association of Realtors announced a 1.9% increase in home resales last month. This was a bit stronger than many had thought, indicating growth in the housing sector. However, it wasn’t an overly strong report and average sales over the past three months still show a decline. The net impact on this morning’s mortgage rates has been minimal.



Federal Open Market Committee (FOMC) Statement

The big events of the day come this afternoon when this week’s FOMC meeting adjourns at 2:00 PM ET. There is a wide consensus that Fed Chairman Powell and friends will make a quarter point upward bump to key short-term interest rates today. That said, there is a possibility of seeing them pause until January’s meeting to get further data. Doing so will allow them to get another month’s worth of employment figures and manufacturing data along with the initial GDP reading of the 4th quarter. The consensus is a quarter point move today and that is what the markets have built in.



Fed Talk

What the markets seem to be most interested in is the Fed’s plans for 2019 and future years. After the previous FOMC meeting, the Fed was expected to make 3 more increases next year. Recent concerns about economic growth, both here and globally, have raised some doubt that they will still make that many increases next year. Good news for bonds and mortgage rates would be a clear downward revision to that estimate. It appears the markets have already priced that move in to current levels. If the Fed fails to indicate that next year’s plan is likely to change, we could see bond prices tank this afternoon and mortgage rates spike higher.



Misc Fed

Along with their post-meeting statement, they will also release revised economic projections at 2:00 PM. That will be followed by a press conference with Chairman Powell at 2:30 PM ET. There is a very high probability that it will be a very active afternoon in the financial and mortgage markets. Therefore, please proceed cautiously if still floating an interest rates and closing soon.




There is a bunch of relevant economic data set for release tomorrow morning. They include Durable Goods Orders, revised 3rd quarter GDP reading, Personal Income & Outlays and revised University of Michigan Index of Consumer Sentiment. They will be addressed in this afternoon’s revision to this report that will be posted shortly after the markets have an opportunity to react to the Fed events.

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.