Rate Lock Advisory

Tuesday, October 27th

Tuesday’s bond market has opened in positive territory following mixed economic data and a relatively calm opening for stocks. The Dow is currently up 4 points while the Nasdaq is up 59 points. The bond market is currently up 5/32 (0.78%), which should keep this morning’s mortgage rates close to Monday’s early pricing.

5/32


Bonds


30 yr - 0.78%

4


Dow


27,689

59


NASDAQ


11,418

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Negative


Durable Goods Orders

September’s Durable Goods Orders was posted at 8:30 AM ET this morning, revealing a 1.9% jump in new orders for items such as airplanes, appliances and electronics. This was a larger increase than 0.6% that was expected, but this data is known to be volatile from month to month. That means the variance in this data isn’t nearly as significant as it would be in other reports. Even a secondary reading that excludes larger and more costly transportation-related orders (i.e.-airplanes) came in stronger than predicted. Those increases give a sign of strength in the manufacturing sector that makes them bad news for bonds and mortgage rates.

Medium


Positive


Consumer Confidence Index (Conference Board)

Also posted this morning was October's Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 100.9 that was down from September’s revised 101.3 and weaker than expectations. The decline means surveyed consumers felt a little worse about their own financial situations than they did last month, which should translate into softer consumer spending that fuels the economy. Therefore, we can consider the data slightly favorable for mortgage rates.

Medium


Unknown


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

Tomorrow doesn’t have any relevant economic data to be concerned with. However, it does have the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. 5-year Notes are being auctioned tomorrow, followed by 7-year Notes Thursday. If these sales are met with a strong demand from investors, particularly tomorrow’s auction, bond prices may rise during afternoon trading. This could lead to improvements in mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. A lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.


Target Cost Realty, LLC

2634 South Carrier Parkway Suite 107
Grand Prairie, Texas 75052