Rate Lock Advisory

Wednesday, March 21th

Wednesday’s bond market has opened down slightly as investors prepare for this afternoon’s Fed results. The major stock indexes are mixed but calm with the Dow down 21 points and the Nasdaq up 13 points. The bond market is currently down 1/32 (2.90%), which with weakness late yesterday should push this morning’s mortgage rates higher by approximately .125 of a discount point over Tuesday’s early pricing.



30 yr - 2.90%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

The National Association of Realtors gave us today’s only relevant economic data, announcing that home resales rose 3.0% last month. This was a larger increase than what analysts were expecting, meaning the housing sector may be stronger than thought. That by theory, is bad news for the bond and mortgage markets. However, the data hasn’t had much of an impact on today’s mortgage pricing.



Federal Open Market Committee (FOMC) Statement

Focus is on this afternoon’s highly important Fed events. They start with the adjournment of the FOMC meeting at 2:00 PM ET. There is a pretty wide consensus that new Fed Chairman Jerome Powell and friends will raise key short-term rates by a quarter point at this meeting. Since the move won’t come as much of a surprise if they do act, market participants will be focused on the Fed’s timetable for future rate hikes. The markets are currently expecting them to make three bumps this year, including this week’s. If the post-meeting statement gives any hints of a fourth rate hike this year, expect the bond market to react negatively and mortgage rates to spike higher. I believe there is some concern in the markets that this will happen. Therefore, if three hikes is reiterated, we could see an afternoon rally in bonds that leads to lower mortgage rates.



Misc Fed

Along with the meeting adjournment will come the Fed's updated economic projections. They may reveal predictions for stronger economic activity than the last update. Then we will get the press conference by Chairman Powell at 2:30 PM, his first as head of the Fed. There is a high probability of seeing an active afternoon in the financial and mortgage markets, so please proceed cautiously if still floating an interest rate.




Look for an update to this report shortly after the markets have an opportunity to react to this afternoon’s activities. There are a couple of minor economic releases tomorrow, neither of which are likely to draw much attention. They will be addressed in this afternoon’s update.

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.