Market Commentary

Updated on March 21, 2023 10:08:15 AM EDT

February's Existing Home Sales report was today's only relevant economic release. The National Association of Realtors announced a 14.5% jump in home resales, breaking the streak of twelve consecutive monthly declines. It was also the largest monthly increase since July 2020, indicating a potential rebound in the housing market. February's strength is being attributed mostly to a decline in mortgage rates, so it will be interesting to see what happens in the coming months. For now, we have to label the report as bad news for mortgage rates because the increase was much stronger than expected.

This week's 20-year Treasury Bond auction is taking place today also. Results of the sale will be posted at 1:00 PM ET, making this an afternoon event for rates. If the sale draws a strong demand from investors, we could see bonds improve during early afternoon trading, possibly leading to a slight downward revision to mortgage pricing. On the other hand, weak interest in the securities could cause an upward revision to rates.

Tomorrow is all about the Fed. Their FOMC meeting will adjourn at 2:00 PM ET. As recent as earlier this month it was widely expected they would make at least a .250 bump to key short-term interest rates with .500 a real possibility also. However, the recent banking crisis has broken the consensus of an increase coming this week. There is now plenty of debate of whether the Fed will actually make a move at this meeting since the previous rate hikes are being blamed as a heavy contributing factor to the bank issues. There is no doubt that this topic will be addressed in the post-meeting statement and press conference.

Along with the adjournment and post-meeting announcement, we will also get the Fed's updated economic projections. The press conference with Chairman Powell will start at 2:30 PM. It is likely going to be a pretty active afternoon in the financial and mortgage markets tomorrow.

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