Rate Lock Advisory

Wednesday, April 14th

Wednesday’s bond market has opened in negative territory, but we still should see an improvement in this morning’s rates. Stocks are showing early gains, pushing the Dow up 156 points and the Nasdaq up 13 points. The bond market is currently down 5/32 (1.63%). Strength late yesterday should allow this morning’s mortgage rates to be lower than Tuesday’s early pricing by approximately.250 of a discount point.



30 yr - 1.63%







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 30-year Treasury Bond auction drew a strong demand from investors, fueling a decent reaction in bonds after results were posted at 1:00 PM ET. They had already made gains from their early morning levels, but then extended them noticeably, causing many lenders to revise rates lower before closing.



Fed Beige Book

There is no relevant economic data scheduled for release this morning. However, the Federal Reserve's Beige Book report will be posted at 2:00 PM ET today. This report is named simply after the color of its cover but provides opinion on economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. If there is a reaction, it will come during mid-afternoon trading.



Retail Sales

Tomorrow has three pieces of data that may affect mortgage rates, including one that is considered highly important to the markets. That will be March's Retail Sales data at 8:30 AM ET. This Commerce Department report gives us a measurement of consumer spending, which is extremely important because that category makes up over two-thirds of the U.S. economy. Forecasts are calling for a large increase of 5.4% in spending, fueled by the economic stimulus checks that went out last month. A jump of that size would normally be concerning to the bond market. However, since it is artificially boosted by the stimulus funds, we shouldn’t see a noticeable reaction unless the increase was much higher or lower than expected. The weaker the level of spending, the better the news it is for mortgage pricing.



Weekly Unemployment Claims (every Thursday)

Also at 8:30 AM ET will be the release of last week’s unemployment figures. They are expected to show that 695,000 new claims for unemployment benefits were filed last week, down from the previous week. Declining claims from week to week indicate a strengthening employment sector. Accordingly, good news for bonds and mortgage rates will be a number that is higher than the previous week’s 744,000.



Industrial Production and Capacity Utilization

March's Industrial Production data will be posted at 9:15 AM ET tomorrow. It tracks output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Analysts are expecting to see a 2.8% rise in production. This data is considered to be only moderately important to rates though. Since it comes on the same day as the CPI, don't expect too much of a reaction to it. Weaker manufacturing levels are favorable to mortgage rates.

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.

Pathfinder Real Estate Services Inc.