Rate Lock Advisory

Thursday, February 22th

Thursday’s bond market has opened fairly flat despite unfavorable economic news and an early stock rally. The major stock indexes are reacting to stronger earnings news, pushing the Dow up 344 points while the Nasdaq has gained 348 points. The bond market is currently down 1/32 (4.32%), but heavy selling late yesterday is going to cause this morning’s mortgage rates to be approximately .250 - .375 of a discount point higher. The actual size of this morning’s increase depends if you saw an intraday upward revision yesterday and if so, the size of that change.



30 yr - 4.32%







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 20-year Treasury Bond auction went poorly with the benchmarks pointing to a lackluster interest in the securities. Bonds had already weakened between morning pricing and the 1:00 PM ET results announcement, but lost more ground after it was made. It was this second move lower (yields higher) that led to widespread intraday upward revisions to mortgage rates. These auctions often are uneventful in terms of impact on rates. However, this one did a little damage, causing rates to move higher.



FOMC Meeting Minutes

Also posted yesterday afternoon were the minutes from last month's FOMC meeting. They gave us no major surprises, reminding everyone that the Fed is playing it safe by choosing to wait for further confirmation inflation is going to retreat back to their preferred rate of 2.00% annually before making their first reduction to key short-term interest rates. Since this fact has been repeatedly driven home by Fed Chairman Powell and other members of the FOMC, it came as no surprise and failed to cause much of a reaction in the bond market. We can mostly blame the auction for yesterday’s afternoon selling in bonds and upward move in rates, not the release of the minutes.



Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were posted at 8:30 AM ET this morning. They revealed 201,000 new claims for benefits were filed last week, down from the revised 213,000 initial filings of the previous week. Analysts were expecting to see an increase in claims, not a lower number. Since declining claims is a sign of strength in the employment sector, we are labeling the report bad news for bonds and mortgage rates.



Existing Home Sales from National Assoc of Realtors

This week’s final relevant economic release came at 10:00 AM ET this morning when the National Association of Realtors gave us January’s Existing Home Sales report. They said the housing sector made gains last month with home resales rising 3.1%. The actual number of sales reached their best level since last August, but the increase was inline with forecasts. We are considering the report neutral to slightly negative for rates because it does show signs of economic strength even though it does not come as a surprise to traders.




Tomorrow doesn’t have anything scheduled that we need to be concerned about. There is a decent chance that it may be the calmest day of the week for rates, assuming something unexpected doesn’t transpire.

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.