Rate Lock Advisory

Wednesday, March 29th

Wednesday’s bond market has opened in positive territory, erasing a good part of yesterday’s late selling. The major stock indexes are mixed with the Dow down 51 points and the Nasdaq up 10 points. The bond market is currently up 7/32 (2.39%), but due to heavy selling yesterday afternoon, we still should see an increase in this morning’s mortgage rates of approximately .125 of a discount point if comparing to Tuesday’s morning pricing. There were widespread upward revisions from lenders during afternoon trading, so how much of an increase you see this morning depends how much of a move your lender made yesterday.

7/32


Bonds


30 yr - 2.39%

51


Dow


20,650

10


NASDAQ


5,885

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Neutral


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

Yesterday’s 5-year Treasury Note auction didn’t go wonderfully but wasn’t too bad either. The benchmarks we use to gauge investor demand showed an average level of interest in the securities. The bond market selling came in two batches but they did not coincide with the results of the auction being posted. Therefore, we cannot blame it on the sale. However, the results don’t give us too much to be optimistic about in today’s 7-year Note auction. Its results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. A strong demand in the securities would be good news for the broader bond market and mortgage rates.

Medium


Positive


Geopolitical/Financial Issues

There is no relevant economic data scheduled for release today. News from overseas that Britain has officially started the process to withdraw from the European Union appears to be the focus of the markets this morning. We do have a couple of Fed speaking engagements taking place today, so we will be looking for any surprises to come from them to have an impact on the bond and mortgage markets.

Low


Unknown


GDP Rev 2 (month after Rev 1)

Tomorrow has two relatively minor pieces of economic data scheduled for release. The first is the final revision to the 4th Quarter GDP at 8:30 AM ET. The Gross Domestic Product is the total of all goods and services produced in the U.S. and is the benchmark measurement of economic activity. It is expected to show that the economy grew at an annual pace of 2.0% last quarter, up slightly from the previous estimate of 1.9% that was released last month. Analysts are now more concerned with next month's preliminary reading of the 1st quarter than data from three to six months ago. So, unless we see a significant revision, this report probably will have little impact on tomorrow’s mortgage rates.

Low


Unknown


Weekly Unemployment Claims (every Thursday)

The other piece of economic data will be last week's unemployment figures, also at 8:30 AM ET. They are expected to show that 245,000 new claims for unemployment benefits were filed last week, down from the previous week’s 258,000 initial claims. This report usually doesn't cause much movement in the markets or mortgage rates unless it shows a significant jump or drop in initial claims for benefits. The higher the number of claims, the better the news it is for bonds and mortgage rates since rising claims is a sign of employment sector weakness.

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.