Rate Lock Advisory

Sunday, May 16th

This week brings us the release of only three relevant monthly economic reports, none of which are considered to be highly important. There is also a Treasury auction and release of FOMC meeting minutes that may come into play midweek. Due to the lack of highly important data and the low number of releases, we should see mortgage rates remain a bit calmer than recent weeks. We will be looking for stocks to give us some direction if they are active. There is nothing of importance scheduled for tomorrow.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Unknown


Housing Starts (New Residential Construction)

April's Housing Starts will begin this week's calendar early Tuesday morning. This data gives us an indication of housing sector strength and mortgage credit demand by tracking newly issued permits and actual starts of new home construction. It is expected to show a small decline in new construction starts, hinting at weakness in the new home portion of the housing sector. This report is normally not considered to be of high importance to the bond market, meaning it likely will have little impact on mortgage rates regardless of what is reveals.

Medium


Unknown


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

Wednesday's only relevant events come during afternoon hours. The first is the results of the 20-year Treasury Bond auction at 1:00 PM ET. As with the other regular Treasury auctions, a strong demand from investors could lead to lower bond yields and a slight improvement to mortgage pricing Wednesday afternoon. A lackluster interest may lead to an upward change in rates.

Medium


Unknown


Federal Open Market Committee (FOMC) Minutes

The second event of the day will be the minutes from the last FOMC meeting. Market participants will be looking for how Fed members feel about the economic rebound, inflation and the possibility of altering their bond buying program. Because of recent public speaking engagements and such, we likely are not going to see too much in the minutes that we didn't already know. They will be released at 2:00 PM ET, so if there is a reaction, it will come during midafternoon trading Wednesday.

Medium


Unknown


Leading Economic Indicators (LEI) from the Conference Board

April's Leading Economic Indicators (LEI) is set to be posted at 10:00 AM ET Thursday. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 1.3% increase from March's reading, meaning that the indicators are predicting economic activity is likely to grow during the summer months. This would be no surprise to the markets since the economic recovery is still in process. A much smaller increase would be considered good news for bonds and mortgage rates.

Medium


Unknown


Existing Home Sales from National Assoc of Realtors

Friday has the final report with the release of April’s Existing Home Sales data from the National Association of Realtors. The data will give us a measurement of housing sector strength by tracking resales of existing homes in the U.S. Housing data is relevant because a weakening housing sector makes broader economic growth less likely. Current forecasts are calling for a rise in sales last month, pointing at growth in the sector. Good news for rates would be a decline in sales.

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Unknown


None

Overall, no day stands out as the most important for rates. We can expect to see minor moves most days unless something unexpected happens. The calmest day may end up being tomorrow or Tuesday. While there is a good chance of seeing rates stay fairly flat the next five days, it would be prudent to keep an eye on the markets if still floating an interest rate just in case that changes.

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.


point b funding