Rate Lock Advisory

Monday, April 6th

Monday’s bond market has opened in negative territory as weekend headlines between Iran and the U.S. fuel higher oil prices and more concern about the length of the conflict. Stocks are opening the week with fairly minor gains of 66 points in the Dow and 79 points in the Nasdaq. The bond market is currently down 2/32 (4.34%), but we still should see an improvement of approximately .125 of a discount point in this morning’s mortgage rates.

2/32

Bonds

30 yr - 4.34%

66

Dow

47,750

79

NASDAQ

21,958

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

ISM Service Index

This week’s economic calendar began late this morning when the Institute for Supply Management (ISM) released their March non-manufacturing index at 10:00 AM ET. They announced a reading of 54.0 that fell short of forecasts and a larger decline from February’s 56.1 than expected. The lower reading means surveyed service sector executives felt better about business conditions in February than they did last month. As a sign of slower economic activity, we can label the report favorable for bonds and mortgage rates.

High

Unknown

None

The rest of the week still has plenty scheduled that has the potential to affect mortgage rates, including two major inflation readings. There are six monthly and quarterly economic reports still scheduled to be released over the remaining days, in addition to the minutes of last month’s FOMC meeting and a couple of Treasury auctions midweek. Oil prices and Iran headlines will also continue to play a factor in this week’s mortgage rates, especially with President Trump’s deadline for Iran to open the Strait of Hormuz set for tomorrow.

Medium

Unknown

Durable Goods Orders

Tomorrow has one of the more important economic reports with February’s Durable Goods Orders set for an 8:30 AM ET release. This data helps measure manufacturing sector strength by tracking new orders at U.S. factories for big-ticket items such as electronics, refrigerators and airplanes that are expected to last at least three years. Analysts are expecting to see a 0.5% rise in new orders. It is worth noting that this data is known to be quite volatile from month to month, so large swings in the headline reading are common and won't be as meaningful as it would be in most other reports. Good news for mortgage rates would be a noticeably large decline.

High

Unknown

Inflation News

Overall, Thursday or Friday are the best candidates for most important day for rates due to the release of highly important inflation data those days. Wednesday morning could be the calmest, even though there are two afternoon events that may influence rates, unless there are new Middle East headlines. There is little doubt that we will see a lot of movement in the financial markets and possibly mortgage rates, so it would be prudent to keep an eye on them if closing in the near future and still floating an interest rate.

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.

Fidelity Bancorp

Company NMLS#: 326625 | DRE#: 01790174

2990 Inland Empire Blvd. Suite 112
Ontario, CA 91764
Equal Housing LenderEqual Housing Opportunity
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