Rate Lock Advisory

Friday, April 3rd

Friday’s bond market has opened in negative territory following stronger than expected employment data. Stocks are closed today for the Good Friday holiday. The bond market is currently down 12/32 (4.35%), which should cause this morning’s mortgage rates to be approximately .125 of a discount point higher than Thursday’s early pricing. If you saw an intraday improvement in rates yesterday, you likely will see a larger increase this morning than those who did not get a revision.

12/32

Bonds

30 yr - 4.35%

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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

Negative

Employment Situation

This morning’s major economic news was the release of March’s Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate slipped to 4.3% last month from February’s 4.4% when analysts were expecting it to be unchanged. The bigger surprise came in the payroll number that jumped to 178,000, greatly exceeding forecasts of 55,000. There were noticeable revisions to both February and January’s job numbers that netted 7,000 fewer jobs year-to-date than previously announced, but March’s unexpected number is significant. The combination of a lower unemployment rate and large number of new payrolls added to the economy certainly erases some justification for the Fed to lower key rates in the near future, even though analysts are not expecting the coming months to show similar results. Accordingly, these readings are clearly bad news for bonds and mortgage rates.

High

Positive

Employment Situation

In a bit of favorable news for rates, the average earnings reading rose only 0.2% last month to fall short of the 0.3% that was expected. Slower earnings growth eases wage inflation concerns that can easily fuel inflation throughout the broader economy. Unfortunately, it was enough of a variance to offset the negative reaction to the payroll and unemployment rate numbers.

Low

Unknown

Holiday Schedule

The bond market will close at noon ET today in observance of the Good Friday holiday. Don’t be surprised to see a bit of pressure in bonds ahead of the early closing as investors look to protect themselves over the extended weekend. This is particularly true today with volatile geopolitical issues currently taking place. All markets will reopen for regular trading hours Monday morning.

Medium

Unknown

ISM Service Index

Next week is packed with economic reports, auctions and other scheduled events that have the potential to influence mortgage rates. There is at least one item every day of the week with the most important coming the middle and latter days, including back-to-back days of key inflation readings. The week’s calendar begins late Monday morning when the Institute for Supply Management (ISM) posts their service index for March. We also will be watching for weekend headlines about the Middle East to drive trading. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.