Rate Lock Advisory

Tuesday, March 31th

Tuesday’s bond market has opened in positive territory again, extending yesterday’s momentum despite unfavorable economic and mixed Iran headlines. Stocks are also posting early gains with the Dow up 566 points and the Nasdaq up 391 points. The bond market is currently up 9/32 (4.31%), which should improve this morning’s mortgage rates by approximately .250 of a discount point.

9/32

Bonds

30 yr - 4.31%

566

Dow

45,782

391

NASDAQ

21,185

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

Consumer Confidence Index

This week’s economic calendar started late this morning with the release of March's Consumer Confidence Index (CCI). The Conference Board announced a reading of 91.8 that was much stronger than expected. The increase caught many off guard considering the spike in gas prices this month. Analysts predicted a reading of 88.0, that would have been a sign that consumers are more worried about their personal finances since February’s revised reading came in at 91.0. A rise means surveyed consumers felt better about their finances this month. The increase in confidence means they are more likely to spend, fueling economic growth. Accordingly, today’s report has to be labeled bad news for mortgage rates.

Medium

Unknown

ADP Employment

Tomorrow looks to be the busiest day of the week with three reports set for release, two of which are considered to be highly important to the financial and mortgage markets. First up will be March’s ADP private-sector Employment report at 8:15 AM ET. This isn’t a governmental report and some question its reliability in gauging employment activity. However, as is the case with any employment-related data, it will draw some attention and could have a minor or moderate impact on rates. By no means do we expect this to be a market-moving release. Forecasts are calling for it to show 40,000 new private-sector payrolls. Good news for mortgage rates would be a much smaller number that would signal weakness in the employment sector.

High

Unknown

Retail Sales

Next up will be the government shutdown-delayed Retail Sales report for February at 8:30 AM ET. This highly important report will give us insight about consumer spending that makes up over two-thirds of the U.S. economy. February’s data is expected to reveal a rise in sales of 0.4%, indicating consumers were still spending and fueling economic activity at that time. However, it is important to note that this report covers the period right before the Iran war started, meaning it won’t help us determine if consumers are spending less because of higher gas and energy costs that have steadily risen as a result of the conflict. Weaker than expected spending numbers could push bond prices higher, leading to lower yields and mortgage rates tomorrow morning.

High

Unknown

ISM Index (Institute for Supply Management)

Finally, the Institute for Supply Management (ISM) will release their March manufacturing index at 10:00 AM ET tomorrow that surveys manufacturing executive sentiment about business conditions. It can have also a noticeable impact on the financial markets and mortgage rates if it varies greatly from forecasts, but likely not as strong as the sales data. Analysts are expecting it to decline slightly from February's 52.4. Any reading above 50.0 is a sign of growth in the sector, so the lower the number, the better the news for rates.

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.