Rate Lock Advisory

Monday, June 27th

Monday’s bond market has opened in negative territory following overnight selling and stronger than expected economic news. Stocks are showing minor losses, pushing the Dow lower by 40 points and the Nasdaq down 50 points. The bond market is currently down 8/32 (3.16%), which should cause this morning’s mortgage rates to be higher than Friday’s early pricing by approximately .125 of a discount point.



30 yr - 3.16%







Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock



Durable Goods Orders

Today’s only relevant economic data was May's Durable Goods Orders at 8:30 AM ET. It revealed a 0.7% rise in new orders for big-ticket products such as electronics, appliances and airplanes. This data is known to be quite volatile from month to month, so the variance from the 0.1% increase that was expected is not as meaningful as it would be in other reports. However, even a secondary reading that excludes the more volatile and costly airplane and other transportation orders also came in above forecasts (up 0.7% vs 0.4%). These readings are a sign that the manufacturing sector was a bit stronger than thought last month, causing us to label the report unfavorable for mortgage rates.



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

We also have a Treasury auction taking place today that may have an impact on rates this afternoon. 5-year Notes are being sold today with results being posted at 1:00 PM ET. If they show there was a strong demand from investors, we could see bond improve enough this afternoon to cause a slight improvement in mortgage pricing. On the other hand, if the sales draw a lackluster interest from investors, mortgage rates may move slightly higher during afternoon trading. This process will be repeated tomorrow when 7-year Notes are sold.



Consumer Confidence Index

June's Consumer Confidence Index (CCI) will be released at 10:00 AM ET tomorrow. It is important to the financial markets because it measures consumer willingness to spend. If consumers are more confident about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, rising confidence can fuel overall economic growth. If it shows a sizable increase in confidence from last month, we can expect to see a negative reaction in bonds and mortgage rates. Forecasts are predicting a reading of 101.0, down from last month's 106.4 reading as consumers grow more cautious about rising inflation. The lower the reading, the better the news it is for bonds and mortgage pricing.




Overall, no day stands out as a clear choice for most important day for rates this week. We got important data this morning and the week will end with an important report. Data and other events in between can cause further volatility. We may also see significant swings in the major stock indexes affect bond trading and mortgage pricing any day (stock gains generally cause bond losses and higher mortgage rates). With so many variables possible this week, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

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... Lock 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.

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