Rate Lock Advisory

Wednesday, March 27th

Wednesday’s bond market has opened in positive territory despite an early stock rally. The Dow is up 317 points while the Nasdaq is up 19 points. The bond market is currently up 3/32 (4.22%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

3/32


Bonds


30 yr - 4.22%

317


Dow


39,600

19


NASDAQ


16,334

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Positive


Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 5-year Treasury Note auction went very well with the benchmarks indicating a decent demand for the securities. Once the 1:00 PM ET results announcement showed it was well received, the broader bond market improved slightly. Unfortunately, it was not enough of a move to cause widespread intraday rate improvements. Most lenders likely opted for this morning’s pricing to reflect those late gains.

Medium


Unknown


Treasury Auctions (5,7,10,20,30 year)

Today’s only relevant event is another auction that may affect rates later this afternoon. Results of the 7-year Note sale will also be posted at 1:00 PM ET. Another strong showing from investors may lead to bond gains and a slight improvement in mortgage rates before the end of the day. However, if today’s sale draws weak interest, we could see bond pressure and an upward revision to mortgage pricing.

Low


Unknown


GDP Rev 2 (month after Rev 1)

Tomorrow has three economic reports we will be watching, starting with the second 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 3.2% last quarter, unchanged from the previous estimate that was announced 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. Accordingly, unless we see a significant revision, this report probably will have little impact on tomorrow’s mortgage rates.

Medium


Unknown


Weekly Unemployment Claims (every Thursday)

Also at 8:30 AM ET will be the release of last week’s unemployment figures. They are expected to reveal 213,000 new claims for benefits were made, up from the previous week’s 210,000 initial filings. Rising claims are a sign of weakness in the employment sector. Therefore, the higher the number tomorrow, the better the news for mortgage rates. It is worth noting that this is just a weekly snapshot and it will take a surprise jump or drop in new claims to have a noticeable influence on mortgage rates.

Medium


Unknown


Univ of Mich Consumer Sentiment (Rev)

The final report of the day comes from the University of Michigan at 10:00 AM ET. Their revised March Consumer Sentiment Index will give us another indication of consumer confidence. Rising confidence is considered bad news for the bond market and mortgage pricing because it usually translates into stronger consumer spending numbers that make a huge part of the U.S. economy. Tomorrow's report is expected to show a reading of 76.5, unchanged from the preliminary estimate posted two weeks ago. Favorable results for bonds and mortgage rates would be a sizable decline in confidence.

Low


Unknown


Holiday Schedule

Tomorrow also has an early close in the bond market ahead of Friday’s holiday. Stocks will trade a full day tomorrow. All of the U.S. markets will be closed Friday in observance of the Good Friday holiday and will reopen for regular trading Monday morning. We sometimes see a bit of weakness in bonds during holiday weeks as traders look to protect themselves over the extended weekend. This raises the possibility of seeing a minor increase in rates before the early close tomorrow afternoon.

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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