Rate Lock Advisory

Thursday, March 23th

Thursday’s bond market has opened in negative territory following mixed economic news. Anticipation over today’s Health Care vote is also affecting early trading. Stocks are showing minor gains with the Dow up 28 points and the Nasdaq up 9 points. The bond market is currently down 3/32 (2.41%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

3/32


Bonds


30 yr - 2.41%

28


Dow


20,869

9


NASDAQ


5,830

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Negative


New Home Sales

February's New Home Sales was the first of this morning’s two pieces of economic data. The Commerce Department announced at 8:30 AM ET that sales of newly constructed homes rose 6.1% last month, exceeding expectations. This points towards stronger growth in the new home portion of the housing sector, making the data negative for bonds and mortgage rates.

Low


Positive


Weekly Unemployment Claims (every Thursday)

Also posted early this morning was last week’s unemployment figures that showed 258,000 new claims for unemployment benefits were filed last week. This was higher than the 240,000 that was expected and an increase from the previous week’s revised 243,000 initial claims. Because rising claims is a sign of a weakening employment sector, we can consider this news positive for mortgage rates.

High


Unknown


Geopolitical/Financial Issues

We are also watching political current events that are likely to cause at least a short-term move in the markets. The House of Representatives is expected to vote on their proposed Health Care plan. What we can expect is a knee-jerk reaction once the vote is finalized. If it passes the House, I believe we will see negative reaction in bonds and quite possibly, upward revisions to rates. On the other hand, failure to vote or even no vote would signal President Trump’s pro-business and pro-economic growth agenda may not come into fruition after all. Since stocks have rallied and bonds have fallen (higher yields and mortgage rates) since the election based on that agenda, we should see stocks backtrack and bonds rally.

High


Unknown


Durable Goods Orders

Tomorrow’s only relevant economic data will be February's Durable Goods Orders at 8:30 AM ET. This Commerce Department report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years such as electronics, appliances and airplanes. This data is known to be volatile from month to month but is still considered to be of fairly high importance to the markets. Analysts are expecting it to show an increase in new orders of approximately 1.3%. A larger increase in orders would be considered negative for bonds as it would indicate strength in the manufacturing sector and could lead to higher mortgage rates Friday morning. Since these orders are volatile, it will take a wider variance from forecasts for it to move mortgage rates than other data requires.

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.