Rate Lock Advisory

Tuesday, April 14th

Tuesday’s bond market has opened in in positive territory following favorable inflation news. Stocks are posting early gains also with the Dow up 239 points and the Nasdaq up 240 points. The bond market is currently up 2/32 (4.28%), which with late gains yesterday should improve this morning’s mortgage rates by approximately .250 of a discount point. If you saw an intraday improvement in pricing before closing yesterday, you should see a smaller improvement this morning.

2/32


Bonds


30 yr - 4.28%

239


Dow


48,477

240


NASDAQ


23,424

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High


Positive


Producer Price Index (PPI)

Today’s big economic news was the release of March’s Producer Price Index (PPI) that showed inflation at the wholesale level of the economy was much softer than expected last month. The overall PPI reading that includes gas prices rose only 0.5% when it was expected to jump 1.1%. More importantly, the core reading that excludes volatile food and energy costs was up only 0.1%, falling well short of the 0.4% that was predicted. Those lower monthly readings allowed the year-over-year readings to come in below expectations also. In short, wholesale inflation wasn’t nearly as bad last month as many had expected. A spike in gas prices as a result of the Iran war had feared higher inflation readings. Therefore, we can easily label this report very good news for bonds and mortgage rates. In fact, it is such good news that it is surprising the bond market hasn’t had a more noticeable reaction to the news.

Medium


Unknown


Fed Beige Book

Tomorrow’s only relevant event comes during afternoon hours since the morning has no economic data scheduled for release. The Federal Reserve will be posting their Beige Book report at 2:00 PM ET that gives us insight into economic conditions by Fed region via business contacts throughout the country. This information is heavily relied on by the Fed when making monetary policy decisions during their FOMC meetings. Traders will be looking for changes in inflation, employment and overall economic activity since the last update. If there is a reaction, it will come during mid-afternoon trading tomorrow.

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.