Rate Lock Advisory

Friday, March 7th

Friday’s bond market has opened in positive territory following the release of mostly favorable employment data. Stocks are showing minor gains of 48 points in the Dow and 59 points in the Nasdaq. The bond market is currently up 5/32 (4.25%), which with gains late yesterday should improve this morning’s mortgage rates by approximately .250 of a discount point if compared to Thursday’s early pricing.

5/32

Bonds

30 yr - 4.25%

48

Dow

42,627

59

NASDAQ

18,129

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Positive

Employment Situation

February’s Employment report was this morning’s major economic news. The 8:30 AM ET release revealed the U.S. unemployment rate rose from January’s 4.0% to 4.1% last month, while 151,000 new jobs were added to the economy. Forecasts had the unemployment rate holding at 4.0% and 160,000 new payrolls. We can label both readings as moderately favorable for bonds and mortgage rates.

High

Neutral

Employment Situation

The third headline number we watch in this report is average hourly earnings. It came in at up 0.3% for the month and 4.0% year over year. Both nearly pegged expectations, showing earnings rose, but not too quickly. Wage pressures are an inflation concern for the broader economy. Therefore, quickly rising wages are bad news for bonds and mortgage rates.

Medium

Unknown

Fed Talk

Fed Chairman Powell is speaking in New York at 12:30 PM ET today. He will be appearing at a monetary policy forum, meaning we could get some headlines from his speech. Anytime he speaks about the economy and/or monetary policy, the markets listen. Topics that are most likely to cause a reaction are plans for future moves with key short-term interest rates, inflation and the impact tariffs may or may not have on the U.S. economy. Any reaffirmation of the Fed making two rate cuts this year should be received as good news for the bond market and mortgage rates.

High

Unknown

Consumer Price Index (CPI)

Next week doesn’t have a large number of relevant events scheduled, but most of what is listed can have a noticeable impact on bond trading and mortgage rates. The economic reports coming next week include two extremely important inflation readings (CPI and PPI). In addition to the data, we have two Treasury auctions of long-term securities midweek that may come into play during afternoon trading. There is nothing of importance scheduled for Monday, leaving the most influential events for the middle days. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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... 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.

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