Rate Lock Advisory

Thursday, July 18th

Thursday’s bond market has opened in negative territory despite favorable results in both of this morning’s minor economic releases. Stocks are also showing early losses, pushing the Dow lower by 30 points and the Nasdaq down 8 points. The bond market is currently down 6/32 (2.06%) but gains late yesterday should allow this morning’s mortgage rates to be slightly better than Wednesday’s morning levels.

6/32

Bonds

30 yr - 2.06%

30

Dow

27,189

8

NASDAQ

8,176

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

Fed Beige Book

Yesterday afternoon’s release of the Fed Beige Book did not reveal any surprises. It showed that the economy grew modestly in most Fed regions since the last update while concerns still exist about the effects of the trade war and its impact on future growth. The bond market did improve during afternoon trading yesterday, but it does not appear that this release was the cause of it.

Low

Positive

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures that were posted at 8:30 AM ET this morning revealed that 216,000 new claims for unemployment benefits were filed. This was an increase from the previous week’s revised 208,000 initial filings. Since rising claims is a sign of employment sector weakness, the figure was good news for bonds and mortgage rates. However, it nearly pegged expectations and this is only a weekly snapshot of the sector. Therefore, we have not seen a reaction to the news this morning.

Medium

Positive

Leading Economic Indicators (LEI) from the Conference Board

June's Leading Economic Indicators (LEI) were also released this morning, but at 10:00 AM ET. The Conference Board announced a 0.3% decline in the indicators when analysts were expecting to see no change. The decline means they are predicting weaker economic activity over the next several months. Since bonds tend to thrive in weaker economic conditions, this was good news for mortgage rates. Unfortunately, this is not considered to be a highly important release, preventing it from having much of an impact on this morning’s mortgage pricing.

Medium

Unknown

University of Michigan Consumer Sentiment (Prelim)

The final economic report of the week will be the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET tomorrow. This index is released in a preliminary form each month and then followed up two weeks later with a final reading. The preliminary reading for July will be posted tomorrow and is expected to show an increase from June's final reading of 98.2. This would indicate that surveyed consumers were a little more comfortable with their own financial and employment situations this month as they were last month. It is believed that if consumer confidence in their own finances is rising, they are more apt to make a large purchase in the near future. And with consumer spending making up such a large part of our economy, investors pay close attention to reports such as these. This means that a decline in confidence would be good news for mortgage rates because it means many consumers will probably delay making a large purchase, limiting economic growth.

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.

Nathan Rufty

NMLS #292056
909-503-5600
NRufty@CanopyMortgage.com


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