Rate Lock Advisory

Wednesday, June 29th

Wednesday’s bond market has opened in positive territory, extending overnight gains. Stocks are mixed again with the Dow up 96 points and the Nasdaq down 21 points. The bond market is currently up 11/32 (3.13%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.



30 yr - 3.13%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



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

Yesterday’s 7-year Treasury Note auction went much better than Monday’s 5-year Note sale. The benchmarks showed a decent demand for the securities if compared to other recent sales. Unfortunately, it wasn’t strong enough to cause a noticeable move in bonds or a revision in mortgage pricing. The sale ended up being a non-factor for rates.



GDP Rev 2 (month after Rev 1)

The second revision to the 1st Quarter Gross Domestic Product (GDP) reading was posted at 8:30 AM ET this morning, revealing the economy contracted at a 1.6% annual rate, signaling the economy was a bit softer during the first three months of the year than previously thought. Weaker economic activity is generally good news for bonds, but this data is aged at this point and the current quarter’s activity will be posted next month. Accordingly, we have not seen much of a reaction to the revised number.



Fed Talk

Fed Chairman Powell is speaking at a Central Bank conference in Portugal this morning. The only major headline to come from it so far is his warning that there is no guarantee the Fed can bring down the high inflation with a “soft landing.” That is where inflation comes down to the preferred annual rate of 2% after they raise key short-term rates without the economy falling into a recession. The opposite is a hard landing, or when the slower activity needed to bring inflation down causes the economy to fall into a recession. The latter would likely be good news for bonds and mortgage rates since they tend to thrive in slower economic times. Because that statement isn’t something we haven’t heard already before, it has had little impact on this morning’s trading.



Personal Income and Outlays

Besides weekly unemployment figures, we also will get May’s Personal Income and Outlays data at 8:30 AM ET tomorrow. It will give us an indication of consumer ability to spend and current spending activity. The theory is if consumer income is rising, they have more money to spend each month. Analysts are expecting to see a 0.5% rise in income while spending also rose 0.5% during the month. This report also includes an important inflation reading that the Fed relies on during their FOMC meetings (PCE). The PCE is expected to rise 0.4%, indicating inflation is still rising. Since stronger inflation erodes the value of a bond's future fixed interest payments, unexpected increases in the PCE make bonds less appealing to investors and usually pushes mortgage rates higher.

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.

Signature Mortgage Inc.

NMLS #39183

3001 Charlestown Xing Way, Suite 3
New Albany, IN 47150