Rate Lock Advisory

Friday, May 9th

Friday’s bond market has opened in positive territory to recover part of Thursday afternoon’s bond selling. Stocks are looking to close the week on a positive note also with the Dow up 76 points and the Nasdaq up 102 points. The bond market is currently up 4/32 (4.36%), but losses yesterday after morning pricing was posted is going to cause this morning’s rates to be approximately .125 - .250 of a discount point higher than Thursday’s morning rates.

4/32

Bonds

30 yr - 4.36%

76

Dow

41,445

192

NASDAQ

18,030

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

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

Yesterday’s 30-year Treasury Bond auction failed to live up to Tuesday’s sale. The benchmarks we use to gauge investor demand indicated Tuesday’s auction drew much more interest than yesterday’s sale did. Soft auctions often lead to broader weakness in the bond market after results are announced at 1:00 PM ET. We did see a negative move after yesterday’s results were posted, but bonds were already in selling mode long before the announcement. In other words, the below-average demand is not the main reason for yesterday’s heavy sell-off in bonds.

Medium

Negative

Tariff News

So, if it wasn’t the auction that led to the bond selling and widespread intraday upward revisions to mortgage pricing, what caused it? There is no clear answer. President Trump’s announcement of a trade deal with the UK is the easy answer. Lower tariffs mean stronger economic growth and less likely of a recession. However, it also should ease some inflation concerns that have been pressuring bonds the past couple of months. If this is the reason for the selling, the reaction seems to be overkill and not justified.

Medium

Unknown

Fed Talk

Today’s only scheduled events that may influence mortgage rates are a large number of speaking engagements by members of the Federal Reserve. There are at least nine different events where a member is either the sole speaker or participating in a group discussion. Most of the event topics appear to be fairly mundane, but one or more of these events may yield a surprise tidbit that is relevant to factors currently driving the markets, such as inflation, tariffs and the slowing economy. These very well may be a non-factor to the markets, but the potential does exist for a reaction, especially when there is no economic data for traders to focus on.

High

Unknown

Consumer Price Index (CPI)

Next week brings us the release of some very important influential economic data, including two key inflation indexes and consumer spending data. The week starts light with nothing scheduled Monday that is considered to be relevant, leaving weekend headlines to drive trading as the new week begins. The most important data is set for release Tuesday and Thursday. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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.