Should Buyers Lock as Mortgage Rate Pressure Builds?

What's Happening Today

Need to buy, refinance, or sell soon? This morning brings more pressure on mortgage rates. Stronger business equipment data pointed to a firmer economy. That can lift inflation expectations, raise borrowing costs in the bond market, and then push mortgage pricing higher. Overnight oil news added another inflation concern. Against that backdrop, Mortgage News Daily's national rate index shows the 30-year fixed national average at 6.45% today. These are nationwide averages from Mortgage News Daily, not quotes or advertised rates from Homeseed Lending Team.

Why mortgage rates are facing more pressure

• A government durable goods report showed March orders rose 0.8%, above the 0.5% forecast. That stronger reading suggests economic activity held up better than expected.
• The same report showed core durable goods orders rose 3.3% for the month. That result also came in above estimates and added to inflation concerns.
• Markets expect the Fed's preferred inflation measure tomorrow to show a pickup from the prior reading. Forecasts call for headline inflation to rise from 2.8% to about 3.4% to 3.5%, while core inflation is expected to edge up from 3.0% to roughly 3.1% to 3.2%.

When economic data beats forecasts and inflation is expected to move higher, mortgage rates often move up as well.

What markets are watching right now

• Overnight reports tied to a possible Iran blockade pushed oil prices higher. Rising energy costs can increase inflation worries and add upward pressure to mortgage rates.
• MBS Highway, a market analytics service, showed bond prices that drive mortgage rates opened lower while stocks moved higher. That early setup points to worse mortgage pricing if the move holds.
• The Federal Reserve announces policy today, and no rate change is expected. Even so, any comments about inflation could spark sharp swings during the trading day.

Higher oil prices, weaker bond pricing, and a Fed announcement have all combined to keep mortgage rates on edge today.

What housing activity says about buyer demand

• Housing starts jumped 10.8% in March to a 1.50 million annual pace. Single-family construction also rose 9.7% from the prior month, which shows builders stayed active.
• Permits for future construction fell 10.8% to a 1.372 million annual pace. They were also down 7.4% from a year earlier, which may point to less new supply later on.
• The Mortgage Bankers Association's Weekly Mortgage Applications Survey (week ending today) showed the 30-year contract rate was little changed at 6.375%. Purchase activity was up 21% from a year ago, and refinance activity climbed 51%. These figures are nationwide survey averages, and they are not a quote, offer, or an advertised rate or APR from Homeseed Lending Team.

Buyer interest still looks solid, but weaker permit activity could make future inventory growth harder if demand stays firm.

How to think about your next move

• If you close within 15 days, locking may deserve a close look. Today's mix of stronger data and inflation risk could lead to a higher payment if rates rise again.
• If your closing is 16 to 45 days away, compare both paths now. Ask for the payment impact of locking today versus waiting for the inflation report and Fed reaction.
• If you are refinancing or shopping without a firm deadline, set a monthly payment goal and track daily changes. As a mortgage broker, Homeseed Lending Team can shop 175+ wholesale lenders to compare options that fit your plan.

The shorter your timeline, the more sense it may make to protect against another rate increase.

Final Takeaway

Get a personalized rate check from the Homeseed Lending Team. We'll compare lock and float options, walk through how today's pricing could affect your payment, and help you decide what fits your timeline.

Homeseed Lending Team, powered by Barrett Financial Group, L.L.C., NMLS #181106. Licensed in AZ, CA, FL, NV, OR, TX, WA. Equal Housing Lender. This article is for informational purposes only and does not constitute an offer to extend credit.