Rate Lock Advisory

Friday, May 29th

Friday’s bond market has opened flat again with little to drive trading this morning. Stocks are showing early gains, pushing the Dow up 197 points and the Nasdaq up 136 points. The bond market is currently down 1/32 (4.44%), but a decent rally midday yesterday should have this morning’s mortgage rates approximately .250 of a discount point lower than Thursday’s early pricing. Many lenders issued an intraday improvement in rates yesterday, so this morning’s change depends on how much of an improvement you saw late yesterday.

1/32

Bonds

30 yr - 4.44%

197

Dow

50,866

136

NASDAQ

27,053

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low

Neutral

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

Yesterday’s 7-year Treasury Note auction was mostly uneventful with the benchmarks pointing to an average demand compared to other recent sales. Without the results showing an overly strong or soft interest in the securities, we saw no reaction to the 1:00 PM ET announcement. While the rally in bonds yesterday did take place around this time, it was not due to the auction.

High

Positive

Iran War Headlines

What fueled yesterday’s late bond rally were more headlines about a peace deal with Iran. There were rumors of such a deal earlier in the week, but details about it started to hit the wires midday yesterday. They supposedly include fully reopening the Strait of Hormuz so oil and other shipping can pass through, bringing down oil costs and also extends the current ceasefire for 60 days, along with other points. We also got confirmation of the Memorandum of Understanding from multiple sources, including people in the White House. That said, President Trump has not said whether it is acceptable to him, so there is a chance the deal could fall apart. This is likely why we saw a noticeable rally in bonds, not a significant rally.

Low

Unknown

None

There is nothing of importance scheduled for release today other than a few Fed speeches. We will be watching for more headlines regarding the Iran war and the potential peace deal as they are the most likely candidates to cause an intraday revision in mortgage pricing.

High

Unknown

ISM Index (Institute for Supply Management)

Next week brings us a handful of relevant economic reports, but they include the new month group such as the highly important ISM manufacturing index (Monday) and governmental Employment report (Friday). In between to those two are a few moderately influential releases also. There is also a strong possibility of Middle East news driving trading, particularly President Trump’s decision about the Iran peace plan. 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... 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.