Rate Lock Advisory

Tuesday, April 24th

Tuesday’s bond market has opened in negative territory yet again, testing a very important threshold for bond yields. The major stock indexes are mixed but calm with the Dow up 13 points and the Nasdaq down 4 points. The bond market is currently down 3/32 (2.98%), which should push this morning’s mortgage rates slightly higher than yesterday’s early pricing.

3/32

Bonds

30 yr - 2.98%

13

Dow

24,461

4

NASDAQ

7,124

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

Both of this morning’s economic reports gave us unfavorable results. The Commerce Department announced that sales of newly constructed homes rose 4.0% last month, exceeding expectations. A sizable upward revision to February’s sales also pushed the number of new home sales higher than previously thought. Because it is a sign of housing sector strength, the news should be considered negative for bonds and mortgage rates. However, the truth is that this report doesn’t carry much significance, so its impact on today’s rates has been minimal.

Medium

Negative

Consumer Confidence Index (Conference Board)

April's Consumer Confidence Index (CCI) was the second release of the morning. The Conference Board said that the CCI stood at 128.7 this month. This was higher than the 126.1 that was forecasted and an increase from March’s reading, meaning surveyed consumers were more optimistic about their own financial situations than expected. That is bad news because rising confidence usually means consumers are more likely to spend, fueling economic growth.

Medium

Unknown

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

Tomorrow has no relevant economic data schedule, but we do have the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. There will be an auction of 5-year Treasury Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours.

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.