Rate Lock Advisory

Wednesday, November 30th

Wednesday’s bond market has opened in negative territory following mixed economic data. Stocks are also mixed with the Dow down 149 points and the Nasdaq up 43 points. The bond market is currently down 10/32 (3.78%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.



30 yr - 3.78%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



ADP Employment

ADP gave us their private-sector Employment report at 8:15 AM ET this morning. With it they announced 127,000 new jobs were added to the economy, falling short of the 200,000 that was expected. The weaker number is a sign the employment sector was not as strong as thought, making the data good news for bonds and mortgage rates.



GDP Rev 1 (month after initial)

The first revision to the 3rd Quarter Gross Domestic Product (GDP) reading was also released early this morning and gave us the negative side of mixed data. It revealed the economy grew at an annual rate of 2.9% during the July through September months. This was an upward revision from the previous estimate of 2.6% and higher than the 2.7% that was expected. Along with the headline number, an inflationary reading within the data was also revised upward. Fortunately, this data is a little aged at this point, limiting its impact on this morning’s rates. However, the stronger economy undermines the theory that we will slip into a recession in the near future, causing us to label the report bad news for rates.



Fed Talk

There are also two afternoon events taking place today that may influence rates. Fed Chairman Powell has a speaking engagement at 1:30 PM ET that will draw plenty of attention. Fed members make speeches on a regular basis, many without much fanfare. However, this one comes from Chairman Powell and the topic is titled Economic Outlook, Inflation and the Labor Market. All three are hot-topics for the bond market and mortgage rates. At the very least we will see a minor move in bond prices during his speech. On the other hand, his words could be a significant market mover, especially when those subjects are being discussed.



Fed Beige Book

Our second afternoon event will be the Federal Reserve's Beige Book at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region via business contacts. Since the Fed uses this info during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, employment or future activity. If there is a reaction to the report, it will come during mid-afternoon trading.



Personal Income and Outlays

Tomorrow will be another busy day for the markets. It will start with October's Personal Income and Outlays data at 8:30 AM ET, giving us an indication of consumer ability to spend and their current spending habits. It also includes an inflation reading (PCE index) that the Fed relies on when making their monetary policy decisions. Because consumer spending is such a large part of the U.S. economy and controlling inflation is a key part of the Fed's responsibilities, data such as this can influence the markets and mortgage rates. The bond market tends to thrive in weaker economic conditions, so good news for mortgage rates would be softer than expected readings, particularly in the PCE. Current forecasts show a 0.4% increase in the income reading while spending rose 0.8%. Analysts are expecting the core PCE to have increased 0.2%.



Weekly Unemployment Claims (every Thursday)

Also at 8:30 AM ET will be the release of last week’s unemployment figures. This is only a minor weekly update and likely will have little impact on tomorrow’s rates since the other morning reports are much more important to the markets. It is expected to show 238,000 new claims for unemployment benefits were filed during the week. The larger the number, the better the news it is for bonds and mortgage pricing.



ISM Index (Institute for Supply Management)

Next up is November's Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET tomorrow. This highly important index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Predictions show a decline from October's reading, which was announced as 50.2. This is extremely important because a reading below 50.0 means more surveyed manufacturing executives felt business worsened during the month than those who said it improved and is considered to be recessionary. The expected 49.9 would be the first sub-50 reading since May 2020, indicating a slowing manufacturing sector. Weaker economic conditions make bonds more attractive and usually leads to lower mortgage rates.

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... Lock 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.

Carolina Equity Services, Inc.

1111 Pemberton Hill Road Ste 101
Apex, NC 27502