Rate Lock Advisory

Tuesday, May 28th

Tuesday’s bond market has opened in negative territory following stronger than expected economic news. Stocks are mixed with the Dow down 122 points and the Nasdaq up 53 points. The bond market is currently down 4/32 (4.48%), but gains late Friday should allow this morning’s mortgage rates to be slightly lower than Friday’s early pricing. The financial and mortgage markets were closed yesterday for the Memorial Day holiday.

4/32


Bonds


30 yr - 4.48%

122


Dow


38,946

53


NASDAQ


16,974

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Negative


Consumer Confidence Index

May’s Consumer Confidence Index (CCI) was released at 10:00 AM ET to start this week’s calendar. The Conference Board announced a surprisingly strong reading of 102.0 that was well above expectations and the first rise after three consecutive monthly declines. Rising confidence means consumers feel better about their own financial and employment situations. This usually translates into stronger consumer spending numbers that fuel economic growth. Accordingly, we have to label the report bad news for bonds and mortgage rates.

Low


Unknown


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

We also have a Treasury auction taking place today. 5-year Notes are being sold with results set for release at 1:00 PM ET. If the sale draws a strong demand from investors, we may see a minor afternoon improvement to mortgage pricing later today. However, a lackluster interest in the securities could lead to a slight upward revision before closing. This scenario will be repeated tomorrow when 7-year Notes are sold.

Medium


Unknown


None

The rest of the week brings us the release of three more relevant monthly and quarterly economic reports for the markets to digest, in addition to a few more Fed speaking engagements before their required two-week quiet period ahead of next month’s FOMC meeting.

Medium


Unknown


Fed Beige Book

Tomorrow morning doesn't have any relevant economic data that we need to be concerned with, but the Fed will post their Beige Book report at 2:00 PM ET. This report details economic conditions throughout the U.S. through the eyes of business contacts in each Federal Reserve region. It is relied upon heavily when determining monetary policy during their FOMC meetings. If there is a reaction in the bond market or mortgage pricing, it will happen during mid-afternoon hours tomorrow.

---


Unknown


none

Overall, Friday is a good candidate for the most important day for rates due to the potential influence of the PCE inflation indexes within the Personal Income and Outlays report. The calmest day may be tomorrow, especially during morning trading. It would be prudent to keep a close eye on the markets if still floating an interest rate and closing in the near future as there is the possibility of volatility this week.

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.


Washburn Realty

609 Parkview Ln.
Richardson, TX 75080-5509