Rate Lock Advisory

Tuesday, June 10th

Tuesday’s bond market has opened in positive territory even though there is little to drive trading this morning. Stocks are fairly calm with the Dow up 15 points and the Nasdaq up 47 points. The bond market is currently up 7/32 (4.44%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

7/32

Bonds

30 yr - 4.44%

15

Dow

42,777

47

NASDAQ

19,638

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Tariff News

Today has nothing scheduled for release that qualifies as relevant economic data. Trade talks with China are ongoing in London still, creating the possibility of tariff-related headlines throughout the day. News of a “Good meeting” caused a minor move in bonds during afternoon trading yesterday that was unfavorable for rates, but it was small enough that lenders didn’t make an upward revision to rates. That move is being reflected in this morning’s pricing.

High

Unknown

Consumer Price Index (CPI)

Tomorrow is a different story though. May’s Consumer Price Index (CPI) will be posted at 8:30 AM ET tomorrow, giving us a highly important measure of inflation at the consumer level of the economy. This data is watched closely and has the potential to lead to significant volatility in the bond market and mortgage pricing if it shows a major surprise. Rising inflation makes a bond's future fixed interest payments less valuable to investors and makes the Fed less likely to lower key short-term rates. Forecasts have the overall index rising 0.2% for the month while the more important core data that excludes volatile food and energy costs is expected to rise 0.3%. Annual readings are predicted to rise a little from April’s year-over-year rate. Weaker than expected readings would be very good news for mortgage rates.

Medium

Unknown

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

Also tomorrow is the first relevant Treasury auction of the week. Results of the day's 10-year Note auction will be posted at 1:00 PM ET. If investor demand was high for these securities, we may see bonds rally during afternoon trading. However, weak interest in these types of sales often lead to bond selling and an increase in mortgage rates late in the day.

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.

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