Rate Lock Advisory

Tuesday, July 5th

Tuesday’s bond market has opened in positive territory despite the release of a piece of unfavorable economic data. Stocks are helping the cause with the Dow down 632 points and the Nasdaq down 202 points. The bond market is currently up 19/32 (2.82%), which should improve this morning’s mortgage rates slightly if comparing to Friday’s early pricing. If you saw an intraday increase Friday after bonds soured, you should get a nice improvement this morning that reverses that selling. The markets were closed yesterday for the Independence Day holiday.

19/32

Bonds

30 yr - 2.82%

632

Dow

30,465

202

NASDAQ

10,925

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Factory Orders

May's Factory Orders data was posted late this morning, starting this week’s calendar of events. The Commerce Department announced a 1.6% rise in new orders at U.S. factories that exceeded expectations of a 0.5% increase. The larger increase is a sign that manufacturing sector activity was stronger than thought last month, making the data bad news for rates. Fortunately, this report isn’t considered to be highly important, allowing the recent positive momentum in bonds to continue.

Medium

Unknown

Stock Influences

We only have two more monthly reports to watch this week, in addition to the minutes from last month’s FOMC meeting. As we are seeing this morning, stock swings can come into play at any time. Generally speaking, stock weakness usually translates into bond gains and lower mortgage rates.

Medium

Unknown

FOMC Meeting Minutes

Tomorrow doesn’t have any relevant economic data scheduled but we will get the June 14-15th FOMC minutes at 2:00 PM ET. There is a possibility of the markets reacting to them, but I don't believe they will reveal a significant surprise that we did not get from the post-meeting statement, revised economic projections and press conference last month. Bond traders are looking for feelings about inflation and the size and frequency of planned rate hikes to control it. If there is a reaction, it will come during mid-afternoon hours tomorrow.

High

Unknown

Employment Situation

Overall, Friday is best candidate for most important day for rates due to the significance of the monthly Employment report, but tomorrow afternoon may also be noticeably active if the FOMC minutes show some surprises. While we likely will not see the movement in rates we saw last week, there a couple days that could bring some volatility. Therefore, 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... 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.

Affordable Mortgage Financing LLC

6083729222
bjpetroselli@centurytel.net


LO NMLS #290370 | Broker NMLS #827573
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TOMAH, WI 54660
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