Rate Lock Advisory

Thursday, April 18th

Thursday’s bond market has opened in positive territory despite stronger than expected results in some important economic data. The major stock indexes are mixed with the Dow up 44 points and the Nasdaq down 22 points. The bond market is currently up 12/32 (2.55%), which should improve this morning’s mortgage rates by approximately .125 of a discount point. Preventing more of an improvement this morning is weakness late yesterday that caused some lenders to revise pricing higher intraday.



30 yr - 2.55%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Retail Sales

Today’s big news was March’s Retail Sales data at 8:30 AM ET that showed an increase of 1.6%. This was much stronger than forecasts of a 0.8% rise, indicating consumers spent much more last month than many had thought. Even a secondary reading that excludes more costly and volatile auto transactions came in stronger than expected. Because consumer spending makes up almost 70% of the U.S. economy, the big increase is bad news for bonds and mortgage rates. Fortunately, early strength from gains overseas was able to overcome this bad news, leaving us with a positive morning for rates.



Weekly Unemployment Claims (every Thursday)

Also at 8:30 AM ET was the weekly unemployment update. It showed that 192,000 new claims for unemployment benefits were filed last week, down from the previous week’s revised 197,000 initial filings. Declining initial claims is a sign of employment sector strength that makes bonds less appealing to investors. However, because this is only a weekly snapshot, it does not carry much significance in the market unless it shows a large variance from forecasts.



Leading Economic Indicators (LEI) from the Conference Board

Lastly, the Conference Board posted their Leading Economic Indicators (LEI) for March at 10:00 AM ET, announcing a 0.4% rise. The increase means the indicators are predicting moderate economic growth over the next several months. That matched expectations, so had no impact on today’s bond trading or mortgage pricing.



Housing Starts (New Residential Construction)

There is a minor piece of economic data set for release tomorrow even though the financial markets will be closed. March's Housing Starts will be posted at 8:30 AM ET. This report tracks groundbreakings of new home construction, giving us a measurement of housing sector strength and future demand for mortgage credit. It is not considered to be highly important to the markets but does draw enough attention to influence trading if it reveals surprisingly strong or weak numbers. The report is expected to show an increase in starts last month. Good news for mortgage rates would be a sizable decline in starts that points toward housing sector weakness.



Holiday Schedule

The bond market will close at 2:00 PM ET today ahead of the Good Friday holiday and will remain closed tomorrow. The stock markets will be open for a full day of trading today but will also be closed tomorrow. They will all reopen Monday for regular trading hours. Because the markets will be closed and most lenders will not be issuing new rate sheets, there will be no update to this report tomorrow.

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.