Rate Lock Advisory

Thursday, February 23th

Thursday’s bond market has opened in positive territory, recovering yesterday’s afternoon losses. The major stock indexes are mixed with the Dow up 13 points and the Nasdaq down 19 points. The bond market is currently up 7/32 (2.39%), but due to selling late yesterday we should see little change in this morning’s mortgage pricing if comparing to Wednesday’s morning rates. If your lender did revise pricing higher before close yesterday, then you should see a small improvement this morning.



30 yr - 2.39%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

We had the first of this week’s two relevant Treasury auctions take place yesterday. The 5-year Note sale did not go very well with several benchmarks pointing towards weak interest in the securities. This news didn’t cause bonds to slide as they were already losing ground before results were posted at 1:00 PM ET. However, the news certainly did not help the cause either. It also gives us little to be optimistic about in today’s 7-year Note auction. Results will also be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. Strong investor demand is good news for the broader bond market and mortgage rates.



Federal Open Market Committee (FOMC) Minutes

Also yesterday was the release of the minutes from the January 31/February 1 FOMC meeting. They didn’t reveal too many surprises, but did reiterate the possibility of another bump to key short-term interest rates in the immediate future. Many analysts now think that the Fed will make another quarter point move at their March 14-15 meeting. This is earlier than what some were expecting at the beginning of the year. It doesn’t change much of anything as long as the Fed makes only three rate increases this year. More increases would be bad news for mortgage rates, while fewer would be positive.



Weekly Unemployment Claims (every Thursday)

Today’s only economic data was last week’s unemployment figures at 8:30 AM ET. They showed that 244,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised 238,000 initial filings. This was slightly higher than the 242,000 that was expected, making the data favorable for mortgage rates.



New Home Sales

Tomorrow has two pieces of economic data that we will be watching, both at 10:00 AM ET. January's New Home Sales report is one. This is the least important report of the week, and is the sister report to Wednesday’s Existing Home Sales data. It also measures housing sector strength and mortgage credit demand, but usually does not have a significant impact on bond trading or mortgage rates unless it shows a significant surprise. Tomorrow's report is expected to show an increase in sales of newly constructed homes, hinting at strength in the new home portion of the housing sector too. The smaller the number of sales, the better the news it is for bonds and mortgage rates.



University of Michigan Consumer Sentiment (Rev)

The University of Michigan's revision to their Index of Consumer Sentiment for February will close out the week's calendar. Current forecasts show this index rising slightly from its preliminary estimate of 95.7. This index is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend, but is not considered to be a major market mover. The lower the reading, the better the news it is for 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.