Rate Lock Advisory

Friday, July 25th

Friday’s bond market has opened in negative territory after this morning’s sole economic data failed to erase overnight weakness. Stocks are calm but mixed with the Dow down 15 points and the Nasdaq up 33 points. The bond market is currently down 4/32 (4.41%), but slight gains late yesterday should keep this morning’s mortgage rates close to Thursday’s early pricing.

4/32


Bonds


30 yr - 4.41%

15


Dow


44,678

33


NASDAQ


21,091

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Negative


Durable Goods Orders

This week’s calendar came to a close with the release of June’s Durable Goods Orders report at 8:30 AM ET this morning. It revealed a 9.3% decline in new orders for big-ticket products such as airplanes, appliances and electronics. This was a smaller than expected drop in orders with the median forecast around 11.0% lower than May’s orders. A secondary reading that excludes more costly and volatile airplane and transportation related orders was up 0.2% when analysts were expecting a 0.1% increase. These numbers are a sign the manufacturing sector was a bit stronger than thought last month. However, the results in this highly volatile data are within the variance range that prevents a strong reaction to the news. Because there is an expectation of large swings in this report, the difference between forecasts and actual results is not nearly as relevant as it would have been in many other releases. Therefore, we are labeling the data to be neutral to slightly negative for bonds and mortgage pricing.

Medium


Unknown


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

Next week is extremely busy in terms of scheduled events that are expected to influence the financial and mortgage markets, some of which are likely to do so heavily. The week starts light Monday with no data and just a shorter-term Treasury auction that has the potential to affect rates slightly during afternoon trading. Tuesday will follow with a moderately important economic report and another similar auction.

High


Unknown


Federal Open Market Committee (FOMC) Statement

Things then quickly get interesting with a slew of activities Wednesday through Friday. Besides the highly anticipated FOMC meeting Wednesday afternoon, we will also get the initial Gross Domestic Product (GDP) reading for the 2nd quarter, key inflation readings (PCE indexes) and the new month reports of ADP private-sector Employment, July’s governmental Employment and ISM manufacturing index. There is little doubt that next week will bring us plenty of market volatility and noticeable movement in mortgage pricing. Look for details on all of next week’s calendar 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.