Rate Lock Advisory

Thursday, November 30th

Thursday’s bond market has opened in negative territory, extending overnight weakness. Stocks are mixed with the Dow up 284 points and the Nasdaq down 16 points. The bond market is currently down 21/32 (4.34%), which should cause an increase of approximately .250 of a discount point in this morning’s mortgage pricing.



30 yr - 4.34%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Fed Beige Book

Yesterday afternoon’s 2:00 PM ET release of the Fed Beige Book gave us some encouraging feedback about the economy. This report is compiled by the Federal Reserve and details economic conditions by each Fed region via their business contacts. Six of the twelve districts reported slowing economic activity, while four said it grew modestly. The remaining two announced activity was mostly flat. There were widespread indications that prices (inflation) had slowed and employment demand is easing. Other than prices remaining elevated throughout all regions, there was very little in the report to disappoint bond traders. Almost all of the headlines to come from the report were bond-friendly. As a result, we saw bond prices briefly extend the day’s previous gains before settling back to their pre-release levels.



Personal Income and Outlays

October's Personal Income and Outlays data was posted at 8:30 AM ET this morning, revealing no big surprises. Income and spending both rose 0.2% while the important inflation reading the Fed relies on (core PCE), nearly matched forecasts. It is surprising that we are seeing a negative reaction to this report in the bond market, but it does follow suit of bonds rallying despite unfavorable indicators earlier in the week.



Weekly Unemployment Claims (every Thursday)

Also released early this morning were last week’s unemployment figures. They showed 218,000 new claims were made for unemployment benefits last week. This was an increase from the previous week’s revised 211,000 and higher than the 215,000 that was expected. The higher number of initial filings is a sign of employment weakness, making the data favorable for mortgage rates.



ISM Index (Institute for Supply Management)

This week’s calendar closes tomorrow with a very important economic release and a public speaking event with Fed Chairman Powell. The Institute for Supply Management (ISM) will release their November manufacturing index at 10:00 AM ET. This highly important index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Predictions show an increase from October's reading that was announced as 46.7. A rise in the index means more surveyed manufacturing executives felt business improved during the month than those who said it worsened. A lower reading than the expected 47.5 would be good news for mortgage rates.



Fed Talk

Chairman Powell will be participating in a discussion with the President of Spelman College in Atlanta at 11:00 AM ET tomorrow. If there is a reaction to something he says, it will likely happen late morning or midday.

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.

Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030