Rate Lock Advisory

Wednesday, March 4th

Wednesday’s bond market has opened in negative territory, giving back part of yesterday’s late rally. Stocks are extending yesterday’s afternoon gains to push the Dow higher by 180 points and the Nasdaq up 205 points. The bond market is currently down 4/32 (4.08%), but those late gains should allow this morning’s mortgage rates to be lower than Tuesday’s early pricing by approximately .125 - .250 of a discount point. If you saw an intraday improvement in rates yesterday, you may see little change this morning or maybe even a slight increase, depending on the size of Tuesday’s afternoon revision.

4/32

Bonds

30 yr - 4.08%

180

Dow

48,682

205

NASDAQ

22,722

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

ADP Employment

February's ADP Employment report was released at 8:15 AM ET this morning, revealing 63,000 new private-sector jobs were added to the economy last month. This was higher than the 45,000 that was expected and comes along with a downward revision of 11,000 to January’s number. We can’t rely on this report as an indicator of what Friday’s governmental Employment report will show, but the higher than expected number of payrolls makes the report unfavorable for bonds and mortgage rates.

Medium

Unknown

ISM Service Index

The Institute for Supply Management (ISM) announced their non-manufacturing index at 10:00 AM ET. They said their service index stood at 56.1 last month, exceeding forecasts of 54.0 and higher than January’s 53.8. The increase means surveyed service sector executives felt business conditions were better last month than the month before. As a sign of economic strength, this report also has to be labeled bad news for rates.

Medium

Unknown

Fed Beige Book

We also have the Fed Beige Book to watch for later today. This periodic Fed report is posted two weeks before their FOMC meeting, detailing economic activity in each Federal Reserve region via their business contacts. The Fed relies heavily on this data when determining monetary policy at their FOMC meetings, so look for a potential reaction during mid-afternoon trading. It probably will not cause a major sell-off in the stock or bond markets but can fuel a strong enough move to cause a minor intraday revision to rates if it reveals noticeably weaker or stronger economic activity and/or inflation since the last update.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Tomorrow has two moderately important economic reports before Friday’s major releases. First will be last week’s unemployment figures at 8:30 AM ET. They are expected to show 215,000 new claims for jobless benefits were filed during the week. The previous week had 212,000 new claims and rising claims are a sign of weakness in the employment sector. Therefore, the larger the number of new filings, the better the news it is for mortgage pricing.

Medium

Unknown

Productivity and Costs (Quarterly)

Employee Productivity and Costs data for the 4th quarter will also be released early tomorrow morning. It can cause a change in the bond market but should have a minimal impact on mortgage pricing. If the productivity reading varies greatly from the 3rd quarter's 4.9% rise, we may see a slight move in mortgage pricing. Higher levels of worker productivity are good news for the bond market because it allows the economy to expand without fueling inflation. AI is expected to improve productivity, so it will be interesting to see how much of an impact it will have on this data.

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.