Rate Lock Advisory

Wednesday, June 17th

Wednesday’s bond market has opened fairly flat despite clearly unfavorable economic data. Stocks are showing early gains, partly due to the same economic headlines. The Dow is currently up 228 points while the Nasdaq is up 68 points. The bond market is currently up 1/32 (4.43%), but gains late yesterday should allow for an improvement of approximately .125 of a discount point in this morning’s mortgage rates.

1/32

Bonds

30 yr - 4.43%

228

Dow

52,228

68

NASDAQ

26,444

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Negative

Retail Sales

This morning’s sole relevant economic data was May's Retail Sales report at 8:30 AM ET. It revealed a 0.9% jump in sales while a secondary reading that excludes more costly and volatile auto transactions rose 0.8%. Both readings were well above expectations of up 0.5% and 0.6% respectively. These numbers mean consumers spent much more than anticipated last month. Because consumer spending makes up over two-thirds of the U.S. economy, this data is bad news for bonds and mortgage rates. Fortunately, traders seem to be more focused on this afternoon’s FOMC events than this report, at least for the time being.

High

Unknown

Federal Open Market Committee (FOMC) Statement

The 2:00 PM ET FOMC meeting adjournment is widely expected to yield no change to key short-term interest rates. Assuming there is no change to key rates, the post-meeting statement could cause some negative volatility if it appears to confirm that there is serious consideration about raising rates before lowering them again. The recently announced Iran peace deal should allow for oil to flow through the Strait of Hormuz, easing gas costs and inflation concerns.

High

Unknown

Misc Fed

This FOMC meeting includes revised economic projections such as overall economic growth (GDP), unemployment and inflation predictions. We will also get their so-called dot-plot that tells us where individual Fed members feel key rates will be in the future. They will be followed by a 2:30 PM ET press conference with the newly appointed Chairman Warsh.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

Tomorrow has a couple of minor economic releases scheduled, such as the weekly unemployment update and the Conference Board’s Leading Economic Indicators. They will be addressed in this afternoon’s update that will be posted shortly after the markets have an opportunity to react to today’s Fed events.

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.

A Home's Best Mortgage, Inc. NMLS# 381479

7985 N Vance Drive Suite 300,
Arvada, CO 80003
Equal Housing Opportunity

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NMLS# 381479
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