Interest Rate Forecast



Rate Lock Advisory

Sunday, January 14th

This week brings us the release of only four pieces of monthly economic data for the markets to digest, with none of them considered to be highly important for mortgage rates. It is a shortened trading week with the stock and bond markets closed tomorrow in observance of the Martin Luther King Jr. holiday. The financial and mortgage markets will reopen Tuesday morning for regular trading hours. Because of the holiday, there will be no update to this report tomorrow morning.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


Industrial Production and Capacity Utilization

There is nothing of importance set for Tuesday. Activities start with December's Industrial Production report at 9:15 AM ET Wednesday. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for an increase in production of 0.4% from November's level. A weaker reading would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought.

Medium


Unknown


Fed Beige Book

Also coming Wednesday is 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. Since the Fed relies heavily on it 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, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

Low


Unknown


Housing Starts (New Residential Construction)

Thursday’s sole monthly report is December's Housing Starts at 8:30 AM ET. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don't see it causing much movement in mortgage rates Thursday but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see a decline in new home starts between November and December.

Medium


Unknown


University of Michigan Consumer Sentiment (Prelim)

The final report of the week is January's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Good news would be a reading weaker than December's 95.9 that means consumers are less likely to make a large purchase in the immediate future.

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Unknown


none

Overall, no day clearly stands out as the most important for mortgage rates. Wednesday is a decent candidate with two reports set for release, but none of this week’s data is considered highly important. We could see movement in mortgage pricing multiple days, although it is likely to be in small increments rather than large noticeable moves. Despite the lack of key data, it still would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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.


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