Rate Lock Advisory

Thursday, June 17th

Thursday’s bond market has opened in positive territory, recovering part of yesterday’s post-FOMC selling. Stocks are mixed again with the Dow down 96 points and the Nasdaq up 39 points. The bond market is currently up 11/32 (1.54%), but heavy selling after the FOMC meeting is going to keep this morning’s mortgage rates approximately .375 of a discount point higher than Wednesday’s morning pricing.

11/32


Bonds


30 yr - 1.54%

96


Dow


33,936

39


NASDAQ


14,078

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Positive


Weekly Unemployment Claims (every Thursday)

The first of this morning’s two economic releases showed there were 412,00 new claims for unemployment benefits filed last week. This was an increase from the previous week’s revised 375,000 initial filings and higher than forecasts of 350.000. An increase such as this indicates the employment sector weakened last week. While this is just a weekly snapshot that doesn’t carry a high level of importance, it still is favorable news for bonds and mortgage rates since it is a sign of economic weakness.

Low


Neutral


Leading Economic Indicators (LEI) from the Conference Board

May’s Leading Economic Indicators (LEI) was posted at 10:00 AM ET, revealing a 1.3% rise in the indicators that matched expectations. The increase means they are predicting economic growth over the next several months. Technically, that is bad news for bonds. But because it came as no surprise, we have seen almost no reaction the news.

Low


Unknown


Stock Influences

Tomorrow doesn’t have any relevant economic data scheduled that we need to be concerned with. There is a situation in the stock markets referred to as Quadruple Witching day, where four different types of stock options and futures expire simultaneously. It is common to see stock volatility on days this happens. Under normal circumstances, stock volatility can influence bond trading and, to some degree, mortgage pricing. However, there seems to be a disconnect right now between the traditional pattern of good days for stocks are bad days for bonds and vice versa. We are currently seeing stocks move in the same direction as bonds more often than opposite, meaning tomorrow’s Quadruple Witching may not influence bond trading or mortgage rates this time.

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... Lock 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.


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