Rate Lock Advisory

Monday, April 24th

Monday’s bond market has opened well in negative territory as the markets react heavily to the France election results. The major stock indexes are sharply higher with the Dow up 221 points and the Nasdaq up 70 points. The bond market is currently down 13/32 (2.29%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point from Friday’s morning pricing. More importantly though, the benchmark 10-year yield has moved back above 2.25%. That is a very important resistance level that if stays above, could be signaling higher mortgage rates in the immediate future.

13/32


Bonds


30 yr - 2.29%

221


Dow


20,769

70


NASDAQ


5,981

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Neutral


None

There is nothing of relevance set for release today. The rest of the week brings us the release of six monthly and quarterly economic reports that may affect mortgage rates in addition to a couple of Treasury auctions. One those reports is considered to be extremely important to the financial and mortgage markets and can cause a great deal of volatility.

Low


Unknown


New Home Sales

The week kicks off at 10:00 AM ET tomorrow morning when March's New Home Sales numbers are posted. This Commerce Department report tracks a much smaller portion of all home sales than last week's Existing Home Sales report did. It also gives us an indication of housing sector strength and future mortgage credit demand, however, unless it varies greatly from analysts' forecasts I am not expecting the data to cause much movement in mortgage rates. Analysts are currently forecasting a slight decline in sales of newly constructed homes. Good news for mortgage rates would be a sizable drop in sales.

Medium


Unknown


Consumer Confidence Index (Conference Board)

April's Consumer Confidence Index (CCI) will also be posted at 10:00 AM ET tomorrow. This index is considered to be an indicator of future spending by consumers. The Conference Board surveys 5,000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and savings, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth to a minimum. On the other hand, a sizable increase could hurt the bond market, pushing mortgage rates higher. It is expected to show a reading of 122.3, which would be a decline from March's 125.6 reading. The lower the reading, the better the news it is for mortgage rates.

Medium


Neutral


None

Overall, Friday is the most important day of the week due to the release of three reports being posted, including the highly important GDP reading. Thursday may also be one of the more active days this week. Wednesday is the best candidate for least important day. With such a busy calendar, it is highly recommended that you maintain contact with your mortgage professional if closing in the near future and still floating an interest rate.

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.