Rate Lock Advisory

Thursday, May 16th

Thursday’s bond market has opened in negative territory, erasing afternoon gains from yesterday. Stocks are showing modest gains of 29 points in the Dow and 5 points in the Nasdaq. The bond market is currently down 6/32 (4.36%), which should bring this morning’s mortgage rates back to Wednesday’s early pricing. Many lenders issued an intraday improvement during afternoon trading. If you saw an improvement before the end of the day, you likely will see it taken back in this morning’s rates.

6/32

Bonds

30 yr - 4.36%

29

Dow

39,937

5

NASDAQ

16,748

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

Weekly Unemployment Claims (every Thursday)

We had three morning economic releases today, starting with last week’s unemployment update at 8:30 AM ET. It revealed 222,000 new claims for benefits were made, down from the previous week’s revised 232,000. Declining claims are good news for mortgage rates, but the 222,000 was a tad higher than expectations. Because of the good and bad in the number and the fact it is just a weekly snapshot, we are considering the report to be neutral for rates.

Low

Positive

Housing Starts (New Home Construction)

Also released early this morning was April's Housing Starts report that showed a 5.7% rise in new home groundbreakings. This was a smaller increase than was expected and that was made up mostly of multi-family homes starts such as apartment buildings. New groundbreakings of the more relevant single-family home category actually declined from March’s level. Accordingly, we can label the report slightly favorable for mortgage rates.

Medium

Positive

Industrial Production

Today’s third report was April's Industrial Production data at 9:15 AM ET. This report tracks output at U.S. factories, mines and utilities, giving us an idea of manufacturing activity. It revealed no change from March’s output when it was expected to rise 0.2%, allowing us to consider the data good news for bonds and mortgage pricing.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

The active week comes to an end tomorrow with just a single piece of data that we will be watching, and it is not known to heavily influence bond trading or mortgage rates. April's Leading Economic Indicators (LEI) will be posted at 10:00 AM ET. The Conference Board is expected to announce a 0.3% decline tomorrow. This report attempts to predict economic activity over the next three to six months, meaning that the indicators would be projecting slower economic activity this summer. A larger decline would be considered good news for bonds and mortgage rates.

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.