Rate Lock Advisory

Wednesday, February 28th

Wednesday’s bond market has opened up slightly after this morning’s economic data showed no major surprises. Stocks are helping the cause with the Dow down 166 points and the Nasdaq down 102 points. The bond market is currently up 2/32 (4.29%), which should allow an improvement in this morning’s mortgage rates of approximately .125 of a discount points.



30 yr - 4.29%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 7-year Treasury Note auction went a little better than Tuesday’s sale with the benchmarks showing an above average demand for the securities compared to other recent sales. Bonds initially made a positive move after results were posted at 1:00 PM ET but gave up those gains shortly after. The move wasn’t strong enough to cause an intraday change in mortgage rates, causing us to label the event as neutral for rates.



GDP Rev 1 (month after initial)

The first revision to the 4th Quarter Gross Domestic Product (GDP) reading was posted at 8:30 AM ET this morning. It showed the economy grew at a 3.2% annual rate, slightly slower than the initial estimate of 3.3% that was announced last month. This matched expectations, preventing much of a response in the bond market or mortgage rates. The downward revision is technically favorable for bonds by theory, but since the data is a bit aged now (Oct - Dec), traders are more interested in what is coming tomorrow.



Personal Income and Outlays

Tomorrow brings us two early morning releases, one of which is much more important than the other. January's Personal Income and Outlays report is the more influential of the two. This data gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for a rise in income of 0.5% while spending is expected to have risen 0.2%. Rising income means consumers have more money to spend. And stronger levels of consumer spending help fuel overall economic growth, making long-term securities such as mortgage-related bonds less attractive to investors. This report also contains a key inflation reading that the Fed relies on during their FOMC meetings (PCE). Accordingly, good news for rates would be weaker numbers.



Weekly Unemployment Claims (every Thursday)

We will also get last week’s unemployment figures tomorrow morning. They are expected to show 206,000 new claims for unemployment benefits were filed, up from the previous week’s 201,000. Rising claims are a sign of weakness in the employment sector, meaning a larger number would be good news for mortgage rates. However, this is just a weekly snapshot and is being released at the same time a very influential inflation reading will be posted. The PCE index will draw much more attention and have a stronger impact on tomorrow’s rates than this weekly data.

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.