Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

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

Yesterday’s 5-year Treasury Note auction drew a decent demand from investors. The benchmarks we used to gauge interest in the securities pointed to an above average demand compared to other recent sales. Bonds had started to give up their morning gains shortly after rates were posted yesterday and steadily declined until results of the auction were announced at 1:00 PM ET. We saw a positive reaction to the results, but it was short-lived with the selling resuming soon after, leading to broad upward revisions to mortgage pricing during afternoon trading. Those results allow us to be a little optimistic about today’s 7-year Note sale. If the 1:00 PM results show similar or stronger demand as yesterday, we could possibly see a slight improvement in mortgage rates before the end of the day.

Medium

Neutral

Fed Beige Book

The second event of the afternoon was the release of the Federal Reserve's Beige Book report at 2:00 PM ET. It showed what many had thought- the recent tariff announcements and retractions or modifications created chaos throughout the Fed’s 12 regions. There were widespread reports of prices rising (inflation) and a surge in automobile purchases before the tariffs started. Many business contacts are predicting weaker spending and fear possible employee layoffs as a result of the uncertainty ahead. The words uncertainty and tariffs dominated the report, being mentioned a combined 187 times. It covered a period up to April 18th, meaning it included most of the trade and tariff-related headlines. The Fed will heavily rely on this report when making monetary policy decisions at their May 6-7 FOMC meeting. Slower economic activity and employment issues are favorable for bonds and mortgage rates, but higher prices are very bad news.

High

Negative

Durable Goods Orders

The first of this morning’s three economic reports was March's Durable Goods Orders report at 8:30 AM ET. It revealed a spike of 9.2% in new orders for big-ticket products such as airplanes, appliances and electronics. This was most likely due to a surge in new orders for these products before tariffs took effect. A secondary reading that excludes more costly and volatile transportation-related orders was unchanged when analysts were expecting to see a 0.3% increase. The data signals there was pre-tariff stockpiling to limit the cost increases of goods coming into the U.S. and reciprocating from other countries. We have to label the report as bad news for bonds and mortgage rates. However, the news hasn’t had an impact on this morning’s trading and likely sets us up for a large decline in April’s orders.

Medium

Positive

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were also posted early this morning. They showed 222,000 new claims for jobless benefits were made, up from the previous week’s revised 216,000 initial filings. Forecasts had the number coming in at 220,000. Rising claims are a sign of weakness in the employment sector, meaning the update is good news for bonds and mortgage rates.

Medium

Positive

Existing Home Sales from National Assoc of Realtors

Today’s third economic release was March's Existing Homes Sales report at 10:00 AM ET. The National Association of Realtors said home resales dropped 5.9% last month, pointing to a weakening housing sector. This was a larger decline than expected and the biggest monthly drop since November 2022. It was also the fewest number of March sales since 2009. A weak housing sector makes broader economic growth less likely, so today’s report is good news for bonds and mortgage rates.

Medium

Unknown

Univ of Mich Consumer Sentiment (Rev)

The week's economic calendar closes tomorrow with the University of Michigan's revised Index of Consumer Sentiment for April at 10:00 AM ET. This report gives us an indication of consumer sentiment and their willingness to spend. Forecasts have the index nearly unchanged from the preliminary 50.8 reading of two weeks ago. This means that surveyed consumers were no more or less optimistic about their own financial situations than they were earlier this month. This data is relevant because waning confidence in their own financial situations usually means consumers are less apt to make a large purchase in the near future. Recent similar releases have shown consumer confidence is quickly declining. The lower the reading, the better the news for rates.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

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

Fed Beige Book

Durable Goods Orders

Weekly Unemployment Claims (every Thursday)

Existing Home Sales from National Assoc of Realtors

Univ of Mich Consumer Sentiment (Rev)

Float / Lock Recommendation