Rate Lock Advisory

Wednesday, April 16th

Wednesday’s bond market has opened in positive territory following uneventful but favorable economic news. Stocks are posting early losses of 298 points in the Dow and 376 points in the Nasdaq. The bond market is currently up 3/32 (4.22%), which with gains from late yesterday should improve this morning’s mortgage rates by approximately .250 of a discount point. If you saw an intraday improvement Tuesday afternoon, you should see a smaller move this morning.

3/32

Bonds

30 yr - 4.32%

298

Dow

40,070

376

NASDAQ

16,446

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Positive

Retail Sales

March's Retail Sales report was posted at 8:30 AM ET this morning, revealing a 1.4% jump in consumer spending last month. A large increase in spending was expected as consumers likely made purchases before tariffs went into effect. A secondary reading that excludes transactions for more costly and volatile auto sales rose 0.5% when it was predicted to be up 0.4%. Overall, these numbers didn’t bring any big surprises, preventing much of a reaction in the bond and mortgage markets.

Medium

Positive

Industrial Production

Also released this morning was March's Industrial Production report at 9:15 AM ET. It showed output at U.S. factories, mines and utilities fell 0.3% to point towards slower manufacturing activity. This was slightly weaker than the 0.2% that was expected, allowing us to consider the data to be favorable for mortgage rates. This report carries less importance than many of the other monthly economic updates we get. Accordingly, we have not seen much of a reaction to data this morning.

Medium

Unknown

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

We have two afternoon events taking place later today. The results of today’s 20-year Treasury Bond auction will be announced at 1:00 PM ET. If it draws a strong demand from investors like last week’s sales did, we could see bonds improve during afternoon trading, possibly leading to a small downward revision in mortgage pricing before the end of the day. However, a weak demand may have the opposite impact, causing an increase in rates later today.

High

Unknown

Fed Talk

There also is a speaking engagement with Fed Chairman Powell at 1:30 PM ET that could be highly influential to the markets. He is participating in a discussion at the Economic Club of Chicago with the topic of the event listed as Economic Outlook. There are plenty of Fed-member speeches this week, but this is the one that is most likely to affect the markets and mortgage rates. His appearance earlier this month contributed to the chaos in the markets when he reminded the audience that the Fed does not have a mandate to stabilize the financial markets. Any surprises will draw a strong reaction, likely leading to an afternoon revision in mortgage rates.

Low

Unknown

Housing Starts (New Home Construction)

Tomorrow has two pieces of data set for release, both at 8:30 AM ET. The monthly report will be March's Housing Starts data that tracks groundbreakings of new home construction and gives us a hint of housing sector strength. The report is expected to show a decline in new starts last month, indicating a bit of weakness in the new home portion of the housing sector. Good news for rates would be a sizable decline, but this data doesn't draw a high level of interest. It will take a large variance from forecasts to have an impact on mortgage pricing.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Next up is last week’s unemployment figures. They are expected to show 225,000 new claims for jobless benefits were made, up from the previous week’s 223,000. Rising claims are a sign of weakness in the employment sector, meaning a large increase would be considered good news for bonds and mortgage pricing.

Low

Unknown

Holiday Schedule

The bond market will close early tomorrow and remain closed Friday in observance of the Good Friday holiday. Stocks will trade a full day tomorrow and be closed Friday. All of the markets will reopen for regular trading next 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 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.