Rate Lock Advisory

Monday, April 29th

Monday’s bond market has opened in positive territory, extending overnight gains. Stocks are starting the week with early gains also. The Dow is up 83 points while the Nasdaq is up 29 points. The bond market is currently up 4/32 (4.64%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

4/32


Bonds


30 yr - 4.64%

83


Dow


38,322

29


NASDAQ


15,957

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Unknown


None

We don’t have anything scheduled for today that is expected to affect mortgage rates. The rest of the week has seven monthly or quarterly economic reports scheduled that we will be watching, two of which are considered to be highly important to the markets. We also have another FOMC meeting that has the potential to cause some fireworks midweek.

Medium


Unknown


Employment Cost Index (Quarterly)

Everything starts at 8:30 AM ET tomorrow with the release of the 1st Quarter Employment Cost Index (ECI). This index tracks employer costs for wages and benefits, giving us a measurement of wage-inflation. A large increase in costs means employers will need to pass those increases into the pricing of their products and services. This is bad news for bonds and mortgage rates. A smaller increase than the 1.0% rise that market participants are predicting would be good news.

Medium


Unknown


Consumer Confidence Index

April's Consumer Confidence Index (CCI) will also be posted tomorrow, but at 10:00 AM ET. The CCI is considered to be an indicator of future consumer spending. The Conference Board surveys 5,000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security or income, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the potential slowdown in spending would help to restrict economic growth. Forecasts show a 1-point decline from March's 104.7. The smaller the reading, the better it is for mortgage pricing.

High


Unknown


Federal Open Market Committee (FOMC) Statement

Overall, it is going to be an interesting week for the markets and mortgage rates. We can expect to see plenty of movement in rates Wednesday due to the morning release of the ADP Employment report and ISM manufacturing index, along with the FOMC events taking place during afternoon hours. Friday has the monthly governmental Employment report being released, making it an extremely important day also. The calmest day for rates may end up being tomorrow. Due to the number of highly-influential events taking place this week, it would be prudent to keep a close 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... Float 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.