Rate Lock Advisory

Friday, December 6th

Friday’s bond market has opened in negative territory following the release of very strong employment numbers. The major stock indexes are showing strong gains, pushing the Dow up 270 points while the Nasdaq has gained 74 points. The bond market is currently down 6/32 (1.82%), but gains late yesterday should keep this morning’s mortgage rates fairly close to Thursday’s early pricing.



30 yr - 1.82%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Employment Situation

This morning’s major economic release was November’s Employment report at 8:30 AM ET that showed the employment sector remained strong last month. It revealed that 266,000 new jobs were added to the economy last month and that October and September's numbers were revised higher by a combined 43,000. Those revisions combined with November’s number pushes the 3-month average above a healthy rate of 200,000 new jobs per month. Also in the bad news column is word that the unemployment rate slipped 0.1% to again stand at September’s rate of 3.5%, which was the lowest since 1969.



Employment Situation

In a bit of somewhat favorable news was a 0.2% rise in average hourly earnings. That reading was slightly softer than the 0.3% that was expected. The bond market is sensitive to the earnings figures, but the other two primary headline numbers far outweigh any benefit we may have gotten from the earnings news.



University of Michigan Consumer Sentiment (Prelim)

The final report of the week came at 10:00 AM ET this morning when December's preliminary reading to the University of Michigan's Index of Consumer Sentiment was released. It came in at 99.2, exceeding expectations and up a few points from November. That means surveyed consumers felt better about their own financial situations than many had thought. This is bad news for bonds and rates because the more comfortable consumers are with their own finances, the more likely they are to make large purchases that fuels economic growth.




Next week brings us the release of several important economic reports along with a couple of potentially influential Treasury auctions and the last FOMC meeting of the year. The calendar is busiest mid-week, but Monday is the only day with nothing scheduled that is relevant to rates. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.