Rate Lock Advisory

Monday, February 24th

Monday’s bond market has opened up sharply as a result of significant stock losses and worsening coronavirus news. The major stock indexes are in a freefall this morning with the Dow losing 746 points and the Nasdaq down 270 points. The bond market is currently up 30/32 (1.37%), which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount point from Friday’s early pricing.



30 yr - 1.37%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Geopolitical/Financial Issues

There is no relevant economic data being released today. The stock selling and bond rally is due to weekend news that the coronavirus crisis is getting worse, not better. News that South Korea and Italy are experiencing a spike in cases has renewed fears about how the situation is going to impact the global economy. Some traders may have tried to convince themselves that it would be mostly isolated to China. However, the South Korea and Italy news this weekend has renewed the initial concerns the markets had when the virus first started making headlines. The fear is that it will have a noticeable negative impact on domestic and global economies. Weaker economic conditions make stocks less appealing to investors and causes funds to shift into bonds, lowering mortgage rates.




This rest of the week brings us the release of six monthly or quarterly economic reports in addition to a couple of Treasury auctions that have the potential to influence rates. None of the events are considered to be extremely important or possible market movers. Several of the reports do carry enough significance to cause a noticeable change in rates though. It will also be interesting to see just how long today’s stock sell-off and bond rally will last.



Consumer Confidence Index (Conference Board)

February's Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow morning. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic growth. It is expected to show an increase in confidence from the 131.6 reading in January to 132.0 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many had thought.




Overall, it looked as if Thursday or Friday were the best candidates for most important day of the week for rates, but it is hard to believe that the economic data scheduled those days can cause the same type of movement in the markets we are seeing this morning. With the coronavirus back in the headlines and plenty of data scheduled this week, no day stands out as a possible quiet one for rates.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float 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.