Rate Lock Advisory

Sunday, April 12th

There are only three monthly economic reports set for release this week with one being labeled a major release. We also have a periodic Fed report scheduled and a large number of Fed-member speeches that have the potential to affect rates. Headlines from the Middle East are also going to affect rates this week, as early as tomorrow. It will be interesting to see how this weekend’s news that peace talks with Iran were not off to a great start and President Trump’s announcement that the U.S. military will start a blockade of all Iranian ports tomorrow will influence the markets. At this moment, stocks appear as if they will open trading tomorrow with sizable losses and oil prices have risen significantly. This likely will lead to a negative open in bonds, followed by an increase in rates tomorrow morning.

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Bonds

Market Closed

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Dow

Market Closed

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NASDAQ

Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

March's Existing Homes Sales numbers from the National Association of Realtors will start this week’s scheduled events at 10:00 AM ET tomorrow. It gives us an indication of housing sector strength and mortgage credit demand and can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a large decline in home resales because a softening housing sector makes broader economic growth more difficult. Analysts are expecting to see a decrease in sales between February and March. The larger the decline, the better the news it is for bonds and mortgage rates.

High

Unknown

Producer Price Index (PPI)

The second report of the week will be the highly important Producer Price Index (PPI) for March at 8:30 AM ET Tuesday morning. It is the sister release of last Friday’s Consumer Price Index, but measures inflationary pressures at the wholesale level of the economy. Analysts are expecting to see a 1.1% jump in the overall reading and a 0.4% rise in the more important core reading that excludes volatile food and energy costs. Weaker inflation readings are almost always good news for bonds and mortgage rates. The large spike in overall wholesale inflation is due to the Iran war and high oil prices that came as a result of it.

Medium

Unknown

Fed Beige Book

Wednesday doesn’t have any morning economic data that we need to be concerned about. However, we do have the Federal Reserve's Beige Book report set for release at 2:00 PM ET. It is named simply after the color of its cover but provides opinion from business contacts 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 moderate impact on the financial markets and mortgage rates if it reveals a significant surprise. If there is a reaction, it will come during mid-afternoon trading Wednesday.

Medium

Unknown

Industrial Production

March's Industrial Production data at 9:15 AM ET is Thursday’s sole relevant monthly release and the final piece of data for the week. It helps us measure manufacturing strength by tracking output at U.S. factories, mines and utilities. Analysts are predicting a 0.1% increase in production, hinting at modest strength in the manufacturing sector. This data is considered to be only moderately important for the markets though. Weaker manufacturing activity is generally considered to be favorable news for mortgage rates, so a decline in output could help push rates slightly lower.

Medium

Unknown

Fed Talk

In addition to the data, there is plenty of Fed talk to listen to this week. With at least one speaking event scheduled each day this week we could see something relevant said at any time. None of them are considered to be key speeches or expected to draw a strong response since their topics don’t appear to be directly related to monetary policy or the economy. The one that stands out as most likely to affect rates comes Friday morning.

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Unknown

none

Overall, the most important day for rates is either tomorrow because of weekend news related to Iran or Tuesday if the inflation data shows any surprises. The calmest day may be Friday. Despite a relatively small number of economic reports being posted, this week still is expected to be quite active for the financial and mortgage markets. Therefore, please proceed cautiously if still floating an interest rate and closing in the near future.

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.