Rate Lock Advisory

Monday, April 20th

Monday’s bond market has opened in negative territory, but much better than it could be. Stocks are on a similar path with the major indexes mixed this morning after being expected to open well in negative ground last night. The bond market is currently down 3/32 (4.25%), which with weakness Friday should cause an increase in this morning’s rates of approximately .125 of a discount point if compared to Friday’s early pricing. If you saw an intraday increase in pricing Friday afternoon, you may not see a change this morning.

3/32

Bonds

30 yr - 4.25%

30

Dow

49,477

71

NASDAQ

24,396

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Unknown

None

There is nothing of importance scheduled for release today. In fact, this week has little in terms of economic data that has the potential to affect rates. There are only two monthly reports coming in addition to a Treasury auction that may affect rates during afternoon trading one day.

High

Negative

Iran War Headlines

What was expected to cause noticeable weakness in this morning’s markets was news over the weekend that Iran had fired on two ships attempting to cross the Strait of Hormuz after they announced earlier that it was completely open for shipping traffic. They also said that the U.S. and Iran are nowhere near a final agreement to end the conflict, contradicting what President Trump had said. Oil prices jumped higher yesterday after those headlines crossed the wires and news broke that the U.S. had disabled and took control of an Iranian ship trying to pass through the U.S. blockade of Iranian ports.

High

Unknown

Geopolitical/Financial Issues

This morning’s lack of a strong reaction to the weekend news is a sign the markets are growing weary of the back and forth, not knowing who is a reliable source for the status of the ceasefire and progress updates on ending the conflict. There isn’t even an agreement that peace talks will begin again this week with the U.S. sending a delegation to Pakistan and Iran saying no plans are set yet. The current ceasefire agreement is supposed to end this Wednesday, meaning who knows what will happen Thursday.

High

Unknown

Retail Sales

Starting this week's very light economic calendar will be the highly important March Retail Sales report at 8:30 AM ET tomorrow. It tracks consumer spending, which makes up over two-thirds of the U.S. economy. Therefore, this report can be highly influential on the financial and mortgage markets. Forecasts have sales rising 1.4% from February with a 1.2% increase if more volatile and costly auto transactions are excluded. From a theoretical perspective, good news for rates would be a much smaller increase in sales. Realistically though, the markets haven't paid too much attention to the typical relevant economic data lately. Their focus has been on the Middle East and inflation led by high oil prices.

---

Unknown

None

Overall, Tomorrow is the most important day of the week based on economic data. News from the Middle East could make any day become active without warning though. A good candidate for calmest day may be Thursday unless geopolitical news changes that. Due to the Fed’s mandatory quiet period ahead of next week’s FOMC meeting, we won’t be hearing much from individual members this week. However, despite a small number of scheduled events, we still should see plenty of movement in rates this week. Accordingly, please 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.