Rate Lock Advisory

Monday, April 21th

Monday’s bond market has opened in negative territory despite heavy stock selling and favorable economic news. Stocks are starting the week with losses of 673 points in the Dow and 403 points in the Nasdaq. The bond market is currently down 8/32 (4.35%), which with Thursday’s late weakness should push this morning’s mortgage rates higher by approximately .250 - .375 of a discount point. The financial markets were closed Friday for the Good Friday holiday.

8/32

Bonds

30 yr - 4.35%

673

Dow

38,468

403

NASDAQ

15,883

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Leading Economic Indicators (LEI) from the Conference Board

Unlike most Mondays, we did get a piece of relevant economic data this morning. The Conference Board gave us their Leading Economic Indicators (LEI) for March at 10:00 AM ET. They announced a 0.7% decline in the indicators when forecasts were calling for a 0.5% decline. This means the indicators are predicting slower than expected economic activity over the next few months. While this is good news for the bond market and mortgage rates, the lower level of importance this report carries is preventing a positive reaction this morning.

Medium

Negative

Domestic Political Issues

There is no single clear reason for this morning’s weakness in bonds. Some theories for the early selling in bonds and stocks blame President Trump’s verbal attacks on Fed Chairman Powell and concerns that he will try to get rid of Chairman Powell before his term ends in May of next year. Other analysts feel uncertainty about what final tariffs will be and their impact on inflation and the global economy are still influencing trading to some degree. Whatever the reason may be, bond losses when stocks are in selling mode is a bit concerning for the overall direction of bond yields and mortgage rates. Hopefully, we will see correction soon where bonds rally on days of heavy stock selling.

Medium

Unknown

None

Tomorrow is the only day of the week without at least a single relevant economic report set for release. The rest of the week has four more monthly reports for the markets to digest, in addition to a couple of potentially relevant Treasury auctions and a periodic Fed-related report to deal with midweek. Also worth mentioning is the fact that corporate earnings season is picking up steam, where publicly traded companies announce their quarterly and annual earnings. Earnings generally affect stocks much more than bonds, but what is bad news for stocks is usually considered to be good news for bonds and mortgage rates.

---

Unknown

none

Overall, no day stands out as likely to be the most active day since none of the week’s data is considered to be key or extremely important to the markets. The same can be said for calmest day because there is at least one item listed each day except tomorrow. Corporate earnings, which are in full swing this week, can heavily influence stock trading any day and usually trickle down to bonds. Even though this doesn’t look to be an overly busy week compared to the past couple, there are enough possible factors and variables to cause plenty of movement in the financial and mortgage markets. It would be prudent to keep a close eye on the markets if still floating an interest rate and closing in the near future as we may see multiple days of noticeable changes in rates.

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.