Rate Lock Advisory

Tuesday, August 16th

Tuesday’s bond market has opened in negative territory despite economic data that gave us conflicting signals about the economy. Stocks are mixed with the Dow up 66 points and the Nasdaq down 85 points. The bond market is currently down 17/32 (2.85%), which should cause an increase in this morning’s mortgage rates of approximately .250 - .375 of a discount point.



30 yr - 2.85%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Housing Starts (New Home Construction)

In economic news, July’s Housing Starts was posted at 8:30 AM ET and revealed that new home groundbreakings fell 9.6% last month to reach their lowest level since February 2021. Single-family home starts that affect mortgage rates more than multi-family figures, dropped 10.1% to touch their weakest level since June 2020. Even a secondary reading that tracks newly issued permits, giving us an idea of future groundbreakings, fell to a 10-month low. These figures point towards a weakening housing sector, particularly the new home portion. Therefore, we can label the report as favorable for bonds and mortgage rates.



Industrial Production

The bad news came from July's Industrial Production data at 9:15 AM ET this morning. It showed that output at U.S. factories, mines and utilities rose 0.6% when forecasts called for only a 0.3% increase. This is a sign of manufacturing sector strength, making the data bad news for bonds and mortgage pricing.



Retail Sales

Tomorrow is expected to be the most active day of the week for mortgage rates. There are three events scheduled, one in the morning and two taking place during afternoon hours. The day starts with July's Retail Sales report at 8:30 AM ET. This Commerce Department report will give us a measurement of consumer spending that is extremely important to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.2% rise in sales, indicating consumers spent a bit more last month than they did in June. Analysts are expecting to see a 0.1% rise in sales if more costly and volatile auto transactions are excluded. Stronger than expected sales would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would be a sign faster than thought economic growth.



Treasury Auctions (5,7,10,20,30 year)

There is a 20-year Treasury Bond auction tomorrow with results being announced at 1:00 PM ET. If investor demand was strong, we could see the broader bond market improve and mortgage rates move slightly lower during early afternoon trading. On the other hand, a lackluster interest could pressure bonds and lead to a slight upward revision to rates before the end of the day tomorrow. Last week's sales were split with the 10-year Note sale drawing a strong demand while 30-year Bonds attracted an average level of interest.



FOMC Meeting Minutes

Finishing tomorrow’s activities will be the release of the minutes from last month’s FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation and future monetary policy moves. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during mid-afternoon trading. This is one of those events that can cause significant movement in rates after its release or be a non-factor. Therefore, be prepared for a move, but not surprised if the impact on rates is minimal.

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.

Lending Arizona, llc

NMLS #174095; MB-0909242

3531 N Pantano Rd
Tucson, AZ 85750-2805