Rate Lock Advisory

Friday, March 27th

Friday’s bond market has opened in positive territory with stocks showing heavy losses. After three days of gains, the Dow is currently down 862 points while the Nasdaq has lost 270 points. The bond market is currently up 30/32 (0.75%), which with yesterday’s steady improvements throughout the day, should allow this morning rates to be noticeably lower than yesterday’s early pricing.



30 yr - 0.75%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Treasury Auctions (5,7,10,30 year securities)

Yesterday’s 7-year Treasury Note auction went even better than Wednesday’s 5-year Note sale. Investor demand was strong enough to see a positive move in bonds after results were posted at 1:00 PM ET. The auction itself wasn’t to source of yesterday’s late strength but did contribute to the afternoon gains in bonds.



Personal Income and Outlays

February’s Personal Income and Outlays report was posted at 8:30 AM ET this morning, revealing a 0.6% rise in the income reading while spending rose 0.2%. The rise in income exceeded expectations and the spending increase pegged forecasts. The report indicates consumers had more money to spend than thought but didn’t spend more. Results of the report are neutral-slightly negative for mortgage rates. However, since it covered February, we have seen no reaction to the news.



University of Michigan Consumer Sentiment (Rev)

The second report of the day was the revised University of Michigan Index of Consumer Sentiment for March. It came in at 89.1, down greatly from the preliminary reading of 95.9 just two weeks ago. This was widely expected due to concerns about the coronavirus and its impact on future income. The large decline is good news because it means consumers are less likely to spend since they are worried about their jobs during this crisis. But the reading fell within the large range of forecasts. Since it did not come as a surprise, we are seeing little reaction to the release.



Economic impact of the Coronavirus

Next week brings us the release of a good number of economic reports that traditionally influence mortgage rates, including a couple of extremely important releases. More importantly, those highly relevant releases will cover March, giving us insight into how bad the early stages of the coronavirus shutdown were affecting the economy. Over the past couple of weeks, the markets have ignored the monthly and quarterly reports because they covered periods that predated the full-blown virus reaction in the U.S. The upcoming reports will start to reflect how bad the economy is being hit during the crisis.




The most important releases will come mid and late week and there is nothing of relevance set for Monday. We can also expect to see the same influences carry into next week (stock volatility, Fed buying of Treasuries and mortgage bonds, lender pipeline control, etc) that have heavily impacted rates recently. We are set up for the same scenario as recent weeks, only with economic data also coming into play. Look for details on next week’s calendar 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... 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.

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