Rate Lock Advisory

Friday, January 27th

Friday’s bond market has opened in negative territory, extending afternoon weakness yesterday that carried into overnight trading. Stocks are showing moderate gains with the Dow up 92 points and the Nasdaq up 63 points. The bond market is currently down 11/32 (3.54%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point if compared to Thursday’s early pricing.

11/32

Bonds

30 yr - 3.54%

92

Dow

34,041

63

NASDAQ

11,573

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

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

Yesterday’s 7-year Treasury Note auction didn’t go as well as Wednesday’s 5-year Note sale, but still drew an above average demand from investors compared to other recent sales. Bonds initially improved after results were posted before losing ground during late afternoon trading. The impact on mortgage rates was minimal.

Medium

Neutral

Personal Income and Outlays

December's Personal Income and Outlays data was posted at 8:30 AM ET today, revealing a 0.2% increase in income and a 0.2% decline in spending. The income reading pegged expectations while the spending was a little weaker than the 0.1% decline that was predicted. Also, the PCE inflation index the Fed relies on didn’t show any surprises, including the year over year figures. It is easy to attribute this report to the morning’s bond losses, but it has had little influence on trading. They were showing weakness during overnight trading.

Medium

Negative

Univ of Mich Consumer Sentiment (Rev)

Closing out this week’s calendar was the revised January reading to the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET. It came in at 64.9, up slightly from the previous estimate of 64.6 two weeks ago. The small upward revision means surveyed consumers felt a tad better about their own financial situations. Since rising confidence usually translates into stronger consumer spending numbers that fuel economic growth, we are labeling the report neutral to slightly negative for rates.

High

Unknown

Federal Open Market Committee (FOMC) Statement

Next week starts light with nothing of importance set for Monday, followed by a couple of moderately important reports Tuesday. The week gets extremely busy at that point with the traditional new month releases (ISM index along with ADP and monthly governmental Employment reports). We also have an FOMC meeting taking place that will adjourn Wednesday afternoon. It is safe to say it will be an interesting week for the financial and mortgage markets. Look for details on the scheduled events 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... 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.

Aspen Financial Group, Inc.
(303) 369-5033
info@alamode.com

12200 E Briarwood Ave
Unit 280
Centennial, CO, 80112


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