Rate Lock Advisory

Tuesday, December 5th

Tuesday’s bond market has opened in positive territory despite unfavorable economic news. The major stock indexes are mixed with the Dow down 128 points and the Nasdaq up 53 points. The bond market is currently up 18/32 (4.19%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 4.19%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



ISM Service Index

November’s Institute for Supply Management’s (ISM) service index was posted at 10:00 AM ET this morning. They announced a reading of 52.7 that was modestly stronger than forecasts and an increase from October’s 51.8. The increase means more surveyed executives in the services sector felt business improved during the month than did last month. Accordingly, we have to label the report bad news for bonds and mortgage rates since it hints at stronger economic activity.



ADP Employment

Tomorrow has two early morning economic releases. November's ADP Employment report is set for release at 8:15 AM ET. It tracks changes in private-sector jobs, using the company's payroll processing clients as a base. While this report does draw attention, it is not a true reflection of the broader employment picture and is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. The markets are expecting to see 127,000 new private-sector payrolls last month. A much smaller number would be considered good news for mortgage rates.



Productivity and Costs (Quarterly)

Tomorrow’s second release will be revised 3rd Quarter Productivity numbers at 8:30 AM ET. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for bonds. It is the conditions surrounding an expanding economy, such as rising inflation, that hurt bond prices and mortgage rates. Current forecasts show a 4.8% rise in productivity, up slightly from the initial estimate. The stronger the reading, the better the news for the bond market. This report generally does not have a noticeable impact on mortgage pricing though, so it will take a wide variance to draw much attention.

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.

Garden Realty

76 Gallup Lane
Waterford, CT 06385