Rate Lock Advisory

Wednesday, March 22th

WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting has adjourned with an announcement of another .250 bump in key short-term interest rates. This didn’t come as too much of a surprise to the markets, but brings the federal funds rate to its highest point since October 2007. The consensus was either this move or a temporary pause to make sure the bank issues were not spreading further.



30 yr - 3.53%







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

The post-meeting statement didn’t yield any major surprises, but did reference the recent banking crisis. It said that inflation remains elevated (bad news for bonds and mortgage rates), but bank concerns may cause lenders to tighten lending to businesses and consumers, effectively doing exactly what the Fed was trying to accomplish by raising short-term rates—slow the economy so prices come down.



Federal Open Market Committee (FOMC) Statement

Another point worth mentioning was the Fed’s terminal rate, or the point they feel the federal funds rate will get that will end the increases, remained unchanged. There were some analysts that felt the terminal rate would be moved higher than previously announced in December. What this means is that the Fed still feels they have the situation under control and their current gameplan will accomplish their end goal of bringing inflation down to their preferred 2.0% annual rate.



Misc Fed

Overall, no significant news to report from this meeting. The Fed’s revised economic projections showed minor revisions. However, the bond market is reacting favorably to the events, currently up 20/32 (3.53%). This should be enough of a move to improve mortgage rates approximately .250 of a discount point from this morning’s levels. Stocks have also improved with the Dow up 156 points and the Nasdaq up 136 points.



New Home Sales

Tomorrow’s sole monthly release is February's New Home Sales data at 10:00 AM ET. The Commerce Department is expected to announce a decline in sales of newly constructed homes last month. This report tracks a much smaller percentage of home sales than yesterday’s Existing Home Sales did, so it should not have much of an influence on the markets and mortgage pricing. A larger than forecasted number of sales would be negative for the bond market and mortgage pricing because it would signal economic strength.



Weekly Unemployment Claims (every Thursday)

The weekly unemployment update is expected to show 204,000 new claims for benefits were filed last week, up from the previous week’s 192,000. Rising claims is a sign of weakness in the employment sector, so the higher the number, the better the news it is for rates.

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.

Crown Mortgage

620 Woodbrook Dr. Suite 2
Charlottesville, VA 22901