Updated on March 20, 2023 10:08:37 AM EDT

This week has only three monthly economic reports set for release in addition to one potentially relevant Treasury auction. What will draw the most attention is the second FOMC meeting of the year and its related events midweek. None of the economic releases are considered key, but one is considered more important than the other two.

The calendar starts tomorrow with the release of February's Existing Home Sales report at 10:00 AM ET. The National Association of Realtors will give us this measurement of housing sector strength and mortgage credit demand. It is expected to reveal an increase in home resales, ending a streak of twelve consecutive months of declines. Bad news would be a sizable increase, indicating that the housing sector is gaining momentum. That could be troublesome for the bond market and mortgage rates because housing strength makes broader economic growth more likely.

We also have a 20-year Treasury Bond auction to watch tomorrow. Results of it will be announced 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 Tuesday afternoon.

Overall, Wednesday is clearly the most important day for rates due to the importance of the FOMC meeting that will be followed by revised economic projections and a press conference. That said, we may see a noticeable move in rates multiple days, especially if new headlines regarding the bank crisis cross the newswires. Accordingly, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

 ©Mortgage Commentary 2023