Rate Lock Advisory

Wednesday, May 22th

Wednesday’s bond market has opened in negative territory even though this morning’s sole relevant economic report gave us favorable results. Stocks are calm with the Dow down 19 points and the Nasdaq up 3 points. The bond market is currently down 4/32 (4.43%), which should cause an increase in this morning’s mortgage rates of approximately .125 of a discount point.



30 yr - 4.43%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Existing Home Sales from National Assoc of Realtors

April's Existing Home Sales report was released at 10:00 AM ET this morning, revealing a 1.9% decline in home resales. Forecasts showed a small increase in sales, meaning the housing sector was weaker than thought last month. This is good news for bonds and mortgage rates because a softening housing sector makes broader economic growth more difficult.



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

We have two afternoon events to watch today, starting with the results of the 20-year Treasury Bond auction at 1:00 PM ET. This sale will not directly impact mortgage pricing, although it can influence general bond market sentiment. If the auction goes poorly, we could see broader selling in the bond market that leads to a slight upward revision to mortgage rates. On the other hand, a strong demand from investors may translate into slightly lower mortgage rates during early afternoon hours.



FOMC Meeting Minutes

Next is the release of the minutes from the April 30 – May 1 FOMC meeting at 2:00 PM ET. They aren’t expected to yield any big surprises, but traders will be looking at them for hints on how individual members may feel about inflation, employment, and economic growth. The goal is to form an opinion about potential future monetary policy moves, such as when key rates may be lowered, or if an increase in rates may be the next move. If there is a reaction to the minutes, it will come during midafternoon trading.



Weekly Unemployment Claims (every Thursday)

Tomorrow brings us the release of two relatively minor pieces of economic data. Last week’s unemployment update will start the day at 8:30 AM ET. It is expected to show 220,000 new claims for unemployment benefits were made, down a little from the previous week’s 222,000. The larger the number of new filings, the better the news for rates because rising claims are a sign of weakness in the employment sector.



New Home Sales

That will be followed by April's New Home Sales report at 10:00 AM ET. This data gives us a small measurement of housing sector strength and mortgage credit demand by tracking sales of newly constructed homes. Most sales in the U.S. will be covered under today’s Existing Home Sales report, meaning this version probably will not have much of an impact on mortgage pricing. Analysts are expecting to see a decline in sales from March's level, indicating the new home portion of the housing sector softened last month. Bond traders would prefer to see a large decline in sales.

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.