Rate Lock Advisory

Monday, June 2nd

Monday’s bond market has opened in negative territory, as did the major stock indexes, due to renewed concerns about what will happen with tariffs in the immediate future. The Dow is down 377 points while the Nasdaq has lost 94 points. The bond market is currently down 7/32 (4.43%), which should keep this morning’s mortgage rates close to Friday’s morning levels. If you saw an intraday improvement Friday afternoon, you should see an increase in this morning’s pricing of the same size.

7/32

Bonds

30 yr - 4.43%

377

Dow

41,892

94

NASDAQ

19,019

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Positive

ISM Index (Institute for Supply Management)

May's manufacturing index from the Institute for Supply Management (ISM) was posted at 10:00 AM ET this morning, revealing a 48.5 reading. This was a slight decline from April’s 48.7, but matched forecasts. The decline indicates surveyed manufacturing executives felt business conditions were a bit softer in May than they were in April. That is a sign of economic weakness that makes the data favorable for bonds and mortgage rates. However, since it failed to surprise us, it hasn’t had an impact on this morning’s mortgage rates. Traders are more focused on the tariff issue today.

Medium

Unknown

Fed Talk

Fed Chairman Powell is giving opening remarks at an international finance conference in Washington DC today. His words today will likely be a non-factor for mortgage rates, but the markets listen closely anytime he speaks. He is expected to speak at 1:00 PM ET, meaning if there is a reaction, it will come during early afternoon trading.

Medium

Unknown

Factory Orders

Tomorrow’s sole relevant economic release is April's Factory Orders report at 10:00 AM ET. It is similar to last week’s Durable Goods Orders report with the difference being tomorrow’s version also includes orders for non-durable goods such as food and clothing. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn't expected to cause much of a change in rates since a good part of the orders were posted in the previous version. Current forecasts are calling for a 3.1% drop in new orders from March's 4.3% jump in pre-tariff orders. A larger decline would be considered favorable for rates even though any impact on rates will likely be minimal.

High

Unknown

None

The remainder of the week has four more relevant monthly and quarterly economic reports scheduled that are expected to influence mortgage rates. One of them is arguably the single most important monthly report and there is at least one report scheduled for release each day. Also scheduled is a periodic Fed update and another batch of Fed-member speaking engagements.

High

Unknown

Employment Situation

Overall, Friday is the most important day for rates by default since it has the almighty Employment report scheduled. Thursday is a good candidate as calmest day. With so much going on this week, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

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.

Dayspring Bank

NMLS # 721567

5370 S 72nd St
Ralston, NE 68127-2854
Equal Housing LenderMember FDIC
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