Rate Lock Advisory

Monday, April 23th

Monday’s bond market has opened in negative territory as the negative tone in bonds carries into the new week. Stocks aren’t contributing to this morning’s selling as the major indexes are showing modest gains. The Dow is currently up 12 points while the Nasdaq has gained 9 points. The bond market is currently down 6/32 (2.98%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Friday’s early pricing.



30 yr - 2.98%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

The week’s calendar started with March's Existing Homes Sales numbers from the National Association of Realtors at 10:00 AM ET. They showed that home resales rose 1.1% last month, falling short of the percentage increase that was expected. However, an upward revision to February’s sales skewed that percentage. The number of home sales last month actually came in higher than what analysts were forecasting, indicating a strengthening housing sector that makes the data slightly bad news for mortgage rates. This is not the cause for this morning’s bond weakness as the market was showing losses before this report was posted.



New Home Sales

Tomorrow has two of the week’s remaining six reports scheduled, starting with March's New Home Sales numbers at 10:00 AM ET. This Commerce Department report tracks a much smaller portion of all home sales than today’s report did. It also gives us an indication of housing sector strength and future mortgage credit demand, however, unless it varies greatly from analysts' forecasts I am not expecting the data to cause much movement in mortgage rates. Analysts are currently forecasting an increase in sales of newly constructed homes. Good news for mortgage rates would be a sizable drop in sales.



Consumer Confidence Index (Conference Board)

April's Consumer Confidence Index (CCI) will also be posted at 10:00 AM ET tomorrow. This index is considered to be an indicator of future spending by consumers. The Conference Board surveys 5,000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and savings, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth to a minimum. On the other hand, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 126.1, which would be a decline from March's 127.7 reading. The lower the reading, the better the news it is for mortgage rates.




Overall, Friday is the most important day of the week due to the release of three reports being posted, including the highly important GDP reading. Thursday may also be one of the more active days due to the Durable Goods Orders report. Wednesday is the best candidate for least important day. We also need to be attentive to the fact that the benchmark 10-year Treasury Note yield broke above a key level last week and extended higher this morning. That could signal higher yields (and mortgage rates) may be possible in the coming days. Throw in week two of corporate earnings season and we have plenty to watch this week. Accordingly, it is highly recommended that you maintain contact with your mortgage professional if closing in the near future and 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... 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.