Indexes Affecting Rate Lock

Medium

Negative

Existing Home Sales from National Assoc of Realtors

The National Association of Realtors gave us this morning’s sole relevant economic data with the release of February’s Existing Home Sales report at 10:00 AM ET. They announced that home resales rose 1.7% last month when forecasts showed a small decline. An increase in sales means the housing sector strengthened from the previous month. Because stronger housing makes broader economic growth more likely, we have to label the report bad news for rates. However, bonds were somewhat unaffected by the news as they were already in negative ground long before this data was posted.

High

Positive

Geopolitical/Financial Issues

Yesterday’s strong afternoon rally in bonds and reversal in stocks was started by oil prices dropping sharply from the recent $120 per barrel peak, then was fueled further by President Trump’s comments that indicated the war with Iran was almost complete, he was loosening oil-related sanctions on other countries and he was taking steps to get ship traffic flowing through the Strait of Hormuz again. This led to bonds and stocks erasing all of their morning losses, causing widespread intraday improvements to mortgage pricing before closing for the day.

High

Unknown

Consumer Price Index (CPI)

Tomorrow brings us highly important inflation data in February’s Consumer Price Index (CPI). The 8:30 AM ET release will give us insight into inflationary pressures at the consumer level of the economy. Rising inflation erodes the value of a long-term security’s future fixed interest payments, making them less appealing to investors. It also reduces the possibility of the Fed lowering key short-term interest rates. Forecasts have the overall CPI reading rising 0.3% and the more important core data that excludes volatile food and energy costs up 0.2%. Analysts are expecting the year-over-year rates to hold at January’s 2.4% and 2.5% respectively. Favorable news for mortgage rates would be smaller monthly increases in consumer inflation and/or slower annual rates. If tomorrow’s release reveals stronger than thought inflation, we can expect to see an increase in mortgage rates.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Also tomorrow is the 10-year Treasury Note auction that may have an impact on afternoon mortgage pricing. If the 1:00 PM ET results announcement indicates investor demand was high for the securities, we may see bonds rally during afternoon trading as it would be a sign that investors still have an appetite for longer-term debt. However, weak demand in these sales could lead to bond selling and an increase in mortgage rates late tomorrow. With oil prices spiking and uncertainty about the Iran war still in the headlines, it is difficult to be overly optimistic that the auction will go well.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Existing Home Sales from National Assoc of Realtors

Geopolitical/Financial Issues

Consumer Price Index (CPI)

Treasury Auctions (5,7,10,20,30 year)

Float / Lock Recommendation