Rate Lock Advisory

Monday, March 27th

Monday’s bond market has opened well in positive territory as the markets react to the healthcare bill failure from Friday. The bill now appears to be dead in its present form, so we are seeing a reaction this morning. Stocks are also helping with the Dow down 118 points and the Nasdaq down 21 points. The bond market is currently up 15/32 (2.36%), which should improve this morning’s mortgage rates by approximately .250 of a discount point over Friday’s morning pricing.



30 yr - 2.36%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock




There is nothing of importance set for release today. The rest of the week brings us the release of four economic reports that have the potential to move mortgage rates, but none are considered to be highly important to the markets. There also are a couple of Treasury auctions set to take place that may influence mortgage rates the middle of the week.



Consumer Confidence Index (Conference Board)

Tomorrow has the first report worth watching with March’s Consumer Confidence Index (CCI) from the New York-based Conference Board at 10:00 AM ET. This index gives us an indication of consumers' willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy. If this report shows that consumer confidence in their own financial situation is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise, pushing mortgage rates higher Tuesday morning. It is expected to show a reading of 113.3 down from February's 114.8 reading. The lower the reading, the better the news it is for bonds and mortgage rates.



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

The first of this week’s two relatively important Treasury auctions that may influence rates is also taking place tomorrow. There will be an auction of 5-year Notes tomorrow and 7-year Notes on Wednesday. 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 to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.




Overall, Friday is likely to be the most active day for mortgage rates but we could see noticeable movement tomorrow also as the markets start the week. The best candidate for calmest day is Thursday. I suspect we may see a big move in stocks soon, possibly this week. If that move is lower, bonds should benefit and mortgage rates would move lower. Despite the lack of key economic data or other highly important events, we still could see an active week for mortgage rates. Accordingly, it still would be prudent to remain in 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... 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.