Rate Lock Advisory

Wednesday, March 21th

This week’s FOMC meeting has adjourned with an announcement of a quarter-point increase to key short-term interest rates. This was widely expected and hasn’t had a noticeable impact on the markets or mortgage rates. The post-meeting statement and updated economic predictions gave us mixed results. The statement noted that the Fed’s economic outlook has strengthened recently but also indicated household spending and business investments have softened since the end of the year. Their economic projections show a stronger rate of GDP growth for 2018 and 2019 than previously estimated.



30 yr - 2.89%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Federal Open Market Committee (FOMC) Statement

There are no significant surprises in that information. What is drawing much attention are the predictions for future rate hikes. Today’s move was unanimous by voting members but the so-called dots that the markets use to gauge Fed member predictions shows a balanced split on the number of further hikes coming his year. Seven members are predicting three or more additional bumps this year while eight members are expecting two or fewer increases. The markets are taking this afternoon’s results to mean that the Fed may need to raise rates three more times this year because of economic growth and strengthening inflation.




The net impact on the markets is actually little. The knee-jerk move was negative for bonds and a positive move in stocks. However, those initial moves have been erased, leaving us close to where we were this morning with stocks mixed and a slight change in bonds. The major stock indexes have swapped positions from this morning, pushing the Dow higher by 27 points while the Nasdaq is down 12 points. The bond market is currently up 1/32 (2.89%), which is an improvement from this morning but not enough of a change to improve rates. At least not yet.



Existing Home Sales from National Assoc of Realtors

The National Association of Realtors gave us today’s only relevant economic data, announcing that home resales rose 3.0% last month. This was a larger increase than what analysts were expecting, meaning the housing sector may be stronger than thought. That by theory, is bad news for the bond and mortgage markets. However, the data didn’t have much of an impact on today’s mortgage pricing.



Weekly Unemployment Claims (every Thursday)

Tomorrow has two minor pieces of economic data scheduled for release. The first will be last week’s unemployment update that is expected to show that 225,000 new claims for unemployment benefits were filed last week. That would be a slight decline from the previous week’s 226,000 initial filings. The higher the number of claims, the better the news it is for mortgage rates. It is worth noting though that this is only a weekly snapshot, so its influence on the markets and mortgage rates if minimal unless it shows a wide variance from forecasts.



Leading Economic Indicators (LEI) from the Conference Board

February’s Leading Economic Indicators (LEI) will be posted at 10:00 AM ET tomorrow. This Conference Board index attempts to measure economic activity over the next three to six months. It is considered to be moderately important, but likely will not have a significant impact on mortgage rates. Current forecasts are calling for a 0.5% increase, meaning it is predicting that economic activity will likely expand moderately in the coming months. A smaller than forecasted rise, or better yet a decline would be considered good news for the bond market and mortgage rates.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock 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.