Rate Lock Advisory

Sunday, March 16th

This week brings us the release of five monthly economic reports in addition to a Treasury auction and the second FOMC meeting of the year. Congress passed the funding bill Friday night, meaning we don’t have to worry about a potential government shutdown in the immediate future. We don’t have a large number of economic releases to be concerned with, but one of them is a major report that can be extremely influential. It, along with other events, is likely to bring more volatility in the markets.

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Bonds

Market Closed

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Dow

Market Closed

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NASDAQ

Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Unknown

Retail Sales

February's Retail Sales data will start this week’s activities at 8:30 AM ET tomorrow. This highly important report will give us insight about consumer spending that makes up over two-thirds of the U.S. economy. This month's report is expected to show a rise in sales of 0.6%, indicating consumers are still spending and fueling economic growth. If it reveals a larger increase, the bond market will likely respond negatively, pushing mortgage rates higher. Good news for rates would be weaker than expected spending numbers.

Low

Unknown

Housing Starts (New Home Construction)

Tuesday has two morning releases and a Treasury auction that we will be watching. The day will begin with the release of February's Housing Starts report at 8:30 AM ET. It is expected to show a modest rise in new home groundbreakings. New home starts are an indicator of future sales and mortgage credit demand. This report usually does not draw a lot of attention, but can slightly affect rates if it reveals a sizable variance from forecasts. The lower the number of starts, the better the news for mortgage rates.

Medium

Unknown

Industrial Production

Next up is February's Industrial Production report that is set for a 9:15 AM ET release. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is predicted to show production rose 0.2% from January's level. A decline would be considered favorable news for bonds and mortgage rates because it would indicate manufacturing sector weakness. Broader economic growth is more difficult when manufacturing activity is slipping and bonds are more attractive to investors during times of weaker economic activity.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Tuesday also has a 20-year Treasury Bond auction taking place. Results of it will be announced at 1:00 PM ET, making this an afternoon event for rates. If the sale draws a strong demand from investors, we could see bonds improve during early afternoon trading, possibly leading to a slight downward revision to mortgage pricing. On the other hand, weak interest in the securities could cause an upward revision to rates Tuesday afternoon. Last week's auctions drew an average interest from investors.

High

Unknown

Federal Open Market Committee (FOMC) Statement

Wednesday doesn’t have any relevant economic data, but we do have an afternoon of Fed events for the markets to digest. They begin at 2:00 PM ET when the two-day FOMC meeting adjourns. It is widely expected that Chairman Powell and friends will leave key short-term interest rates unchanged at this meeting. What traders are most interested in is how many rate cuts do the Fed think they will make this year and when the next may come. Current expectations are for two reductions this year, but recent tariff headlines and economic data have put into question if the Fed’s game plan will change.

High

Unknown

Misc Fed

Along with the adjournment and post-meeting announcement, we will also get the Fed's updated economic projections at 2:00 PM ET. These economic predictions include what is known as the dot plot that tells us each member’s individual predictions for key rates. Analysts use them as the Fed’s official projections for rates. The press conference with Chairman Powell will start at 2:30 PM. It is likely going to be an active afternoon in the financial and mortgage markets Wednesday, especially if predictions alter the current plan of two rate cuts this year.

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

Thursday has two monthly economic releases in addition to the weekly unemployment update. February's Existing Home Sales report is scheduled for 10:00 AM ET. The National Association of Realtors will give us this measurement of housing sector strength and mortgage credit demand. It is expected to reveal a decline in home resales, hinting at weakness in the housing market. Bad news would be a sizable increase, meaning the housing sector is gaining momentum. That could be a little troublesome for the bond market and mortgage rates because housing strength makes broader economic growth more likely.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

The final event of the week will be the Conference Board posting their Leading Economic Indicators (LEI) for February, also at 10:00 AM ET Tuesday. These indicators attempt to predict economic activity over the next three to six months, but are considered to be only moderately important. If the 0.2% decline estimate is accurate, it would mean the indicators are pointing to slower economic activity in the near future. A larger decline would be good news for the bond market and mortgage rates.

High

Unknown

Geopolitical/Financial Issues

Overall, Wednesday is the most important day for rates by default due to the FOMC events. We could also see noticeable move tomorrow if the consumer spending data varies much from forecasts. The calmest day may be Friday since it is the only day without an event scheduled unless something unexpected happens. Now that the government shutdown issue is behind for at least 6 months, we don’t need to worry about losing some of the highly important governmental economic data that the markets rely on. It should be another very active week for the financial and mortgage markets, especially if there are new tariff and/or other geopolitical headlines. Therefore, please proceed cautiously if still floating an interest rate and closing in the near future. It would be prudent to keep a close eye on the markets the next few days.

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.