Rate Lock Advisory

Sunday, March 19th

This week has only three monthly economic reports set for release in addition to one potentially relevant Treasury auction. What will draw the most attention is the second FOMC meeting of the year and its related events midweek. None of the economic releases are considered key, but one is considered more important than the other two.

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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

Geopolitical/Financial Issues

Tomorrow has nothing scheduled that we need to be concerned about, but we still may see weekend news about Credit Suisse and the world’s central bankers working together to keep the global monetary system liquid move the markets in lieu of any data. As of this evening, it looks as if those headlines are going to have a negative impact on our bond trading, leading to higher mortgage rates tomorrow. Plenty can happen between now and tomorrow’s open though.

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

Activities start late Tuesday morning with the release of February's Existing Home Sales report at 10:00 AM ET. The National Association of Realtors will give us this measurement of housing sector strength and mortgage credit demand. It is expected to reveal an increase in home resales, ending a streak of twelve consecutive months of declines. Bad news would be a sizable increase, indicating that the housing sector is gaining momentum. That could be troublesome for the bond market and mortgage rates because housing strength makes broader economic growth more likely.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Tuesday also has the 20-year Treasury Bond auction taking place. Results of it will be announced at 1:00 PM ET, making this an afternoon event for rates. If the sale draws a strong demand from investors, we could see bonds improve during early afternoon trading, possibly leading to a slight downward revision to mortgage pricing. On the other hand, weak interest in the securities could cause an upward revision to rates Tuesday afternoon.

High

Unknown

Federal Open Market Committee (FOMC) Statement

The Fed events begin at 2:00 PM ET Wednesday when the two-day FOMC meeting adjourns. As recent as earlier this month it was widely expected they would make at least a .250 bump to key short-term interest rates with .500 a real possibility also. However, the recent banking crisis has broken the consensus of an increase coming this week. There is now plenty of debate of whether the Fed will actually make a move at this meeting since the previous rate hikes are being blamed as a heavy contributing factor to the bank issues. There is no doubt that this topic will be addressed in the post-meeting statement and press conference.

High

Unknown

Misc Fed

Along with the adjournment and post-meeting announcement, we will also get the Fed's updated economic projections. The press conference with Chairman Powell will start at 2:30 PM. It is likely going to be a pretty active afternoon in the financial and mortgage markets Wednesday.

Low

Unknown

New Home Sales

Thursday’s sole monthly release is February's New Home Sales data at 10:00 AM ET. The Commerce Department is expected to announce a decline in sales of newly constructed homes last month. This report tracks a much smaller percentage of home sales than Tuesday’s Existing Home Sales does, so it should not have much of an influence on the markets and mortgage pricing. A larger than forecasted number of sales would be negative for the bond market and mortgage pricing because it would signal economic strength.

High

Unknown

Durable Goods Orders

Durable Goods Orders for February will be released early Friday morning. It will give us insight into the manufacturing sector by tracking new orders at U.S. factories for big-ticket items such as electronics, refrigerators and airplanes. Analysts are expecting to see a 1.6% rise in new orders. It is worth noting that this data is known to be quite volatile from month to month, so large swings in the headline reading are common and won't be as meaningful as it would be in most other reports. Good news for mortgage rates would be a noticeably smaller increase or a decline.

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Unknown

None

Overall, Wednesday is clearly the most important day for rates due to the importance of the Fed’s actions. Tomorrow may also be active for rates as the markets react to the more banking news. It is highly likely we will have another week with plenty of movement in mortgage pricing. Accordingly, it would be prudent to keep an eye on the markets 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.

Leatherstocking Group, Inc.

Loan Officer NMLS #271856 - Company NMLS #17294

20 Chestnut Street, #1
Cooperstown, N.Y. 13326
Equal Housing LenderEqual Housing Opportunity

Registered Mortgage Broker - NYS Department of Financial Services
NMLS Consumer Access

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