Rate Lock Advisory

Thursday, November 7th

THURSDAY AFTERNOON’S UPDATE:/
This week’s FOMC meeting has adjourned with an announcement of a quarter-point cut to key short-term interest rates after they made an initial half-point cut during September’s meeting. This was the move that was widely expected. What is now up in the air is what they will do at next month’s meeting and the early part of next year. Changes between the September written statement and today’s release is drawing some attention, particularly regarding progress in bringing inflation down. They referenced solid growth in the economy, which makes easing interest rates a risk since lower rates often contribute to stronger economic activity that fuels inflation. On the other hand, they also seem to be a bit concerned about the employment sector and lower rates should help support that.

20/32


Bonds


30 yr - 4.35%

11


Dow


43,718

279


NASDAQ


19,263

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Neutral


Federal Open Market Committee (FOMC) Statement

In short, there were no bombshells or significant surprises in the statement. Chairman Powell is still holding his press conference, so his words still could move the markets further from current levels. The major indexes are fairly close to where they were mid-morning when rates were posted. The Dow is down 11 points and the Nasdaq is up 279 points. The bond market is currently up 20/32 (4.35%). This is enough of a variance from this morning that a few lenders may issue a slight intraday improvement to rates soon. Unless something drastic happens over the next hour or so, most lenders will likely wait for tomorrow’s pricing to reflect this afternoon’s post-FOMC meeting.

Medium


Positive


Weekly Unemployment Claims (every Thursday)

One of this morning’s two morning economic releases was last week’s unemployment update that showed 221,000 initial claims for jobless benefits were made. This pegged expectations even though the previous week’s new filings were revised up to 218,000. Rising claims are a sign of weakness in the employment sector, making the data good news for rates.

Medium


Negative


Productivity and Costs (Quarterly)

3rd Quarter Productivity and Labor Costs data was the second release. It revealed worker output rose at a 2.2% annual rate, falling short of the 2.4% that was predicted. This is another number where higher or stronger is better news for bonds and mortgage rates, meaning the headline is actually neutral to slightly negative. A secondary reading in this report that is related to inflation is clearly bad news for the bond market. Unit Labor Costs jumped to a 1.9% annual pace when it was expected to be nearly half of that. Combined, the numbers made the report unfavorable for mortgage rates.

Medium


Unknown


Univ of Mich Consumer Sentiment (Prelim)

This very active week’s calendar comes to a close at 10:00 AM ET tomorrow when the University of Michigan posts their November Index of Consumer Sentiment. The index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 70.9, up from October's final reading of 70.5. Favorable news for bonds 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. The lower the reading, the better the news for mortgage shoppers.

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.


Integrated Financial Solutions, LLC

11110 Dovedale Ct 28A
Marriottsville, MD - Maryland 21104