Rate Lock Advisory

Monday, February 27th

Monday’s bond market has opened in negative territory, erasing gains from Friday afternoon. Stocks are starting the week flat with the Dow down 2 points and the Nasdaq down 1 point. The bond market is currently down 8/32 (2.34%), but due to Friday’s late gains we should see little change in this morning’s mortgage rates if comparing to Friday’s early pricing. If your lender improved rates during afternoon trading Friday, you should see an increase this morning by the same amount.

8/32


Bonds


30 yr - 2.34%

2


Dow


20,819

1


NASDAQ


5,844

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Positive


Durable Goods Orders

Today’s sole relevant economic report was January's Durable Goods Orders at 8:30 AM ET. It showed a 1.8% decline in new orders for big-ticket products such as appliances and airplanes, matching forecasts. However, a secondary reading the excludes more costly and volatile airplane orders showed a 0.2% decline when analysts were expecting to see a 0.5% increase. This means that the manufacturing sector was weaker than expected if transportation-related orders are excluded. Therefore, we can consider the data slightly positive for bonds and mortgage rates.

Medium


Unknown


GDP Rev 1 (month after initial)

Tomorrow has two of this week’s five remaining monthly and quarterly releases. The first is the revised 4th Quarter GDP reading at 8:30 AM ET. The GDP is considered the benchmark reading of economic growth or contraction because it is the total sum of all goods and services produced in the U.S. Analysts' forecasts currently call for an annual rate of growth of 2.1%, up from the initial estimate of 1.9% that was posted last month. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market, while a larger downward revision would be good news for bonds and could lead to improvements in mortgage pricing.

Medium


Unknown


Consumer Confidence Index (Conference Board)

February's Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic growth. It is expected to show a decline in confidence from the 111.8 reading in January to 111.5 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many had thought.

Medium


Unknown


None

Overall, Wednesday is the best candidate for most important day of the week with two important reports scheduled in the morning and the afternoon release of the Fed Beige Book that can affect the Fed’s voting on interest rate changes. The calmest day will likely be Thursday. Due to the importance of some of this week’s data, it is strongly recommended that you maintain contact with your mortgage professional 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.