Rate Lock Advisory

Sunday, January 15th

This week brings us the release of only four pieces of monthly economic data for the markets to digest, with one of them considered to be highly important for mortgage rates. It is a shortened trading week with the stock and bond markets closed tomorrow in observance of the Martin Luther King Jr. holiday. The financial and mortgage markets will reopen Tuesday morning for regular trading hours. Because of the holiday, there will be no update to this report tomorrow morning.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Unknown


Consumer Price Index (CPI)

The first data of the week is December's Consumer Price Index (CPI) at 8:30 AM Wednesday. This is one of the more important monthly reports for the bond market each month since it measures inflationary pressures at the consumer level of the economy. As with last week's Producer Price Index (PPI), there are two readings in the release. The overall index is expected to remain rise 0.3% from November's reading while the core data rose 0.2%. Weaker than expected readings would be favorable news and should lead to bond strength and lower mortgage rates Wednesday morning.

Medium


Unknown


Industrial Production and Capacity Utilization

Next up is December's Industrial Production report at 9:15 AM ET Wednesday. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for an increase in production of 0.6% from November's level. A weaker reading would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought. However, the CPI report is more important to the bond market than this data is and will likely have a heavier influence on mortgage rates.

Medium


Unknown


Fed Beige Book

The third release Wednesday will be the Federal Reserve's Beige Book at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

Low


Unknown


Housing Starts (New Residential Construction)

December's Housing Starts will be posted at 8:30 AM Thursday. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don't see it causing much movement in mortgage rates Thursday but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see an increase in new home starts between November and December.

Medium


Unknown


None

Overall, Wednesday is the most important day of the week with three of the four reports scheduled. The calmest day will likely be Friday as the markets may be active Tuesday following the three-day weekend. There are several speaking engagements scheduled for Fed members throughout the week, so any surprises could also affect the markets and move mortgage rates. The upward move in bond yields and mortgage rates that we saw last week could carry into this week. Therefore, please proceed cautiously if still floating an interest rate and closing in the near future.

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.