Rate Lock Advisory

Wednesday, July 6th

Wednesday’s bond market has opened in negative territory as traders take a cautious approach to this afternoon’s Fed release. Stocks are extending their afternoon rebound from yesterday’s early sell-off, pushing the Dow higher by 118 points and the Nasdaq up 46 points. The bond market is currently down 8/32 (2.84%), which should create an increase of approximately .125 of a discount point in this morning’s mortgage rates.



30 yr - 2.84%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



FOMC Meeting Minutes

There is no relevant economic data set for release this morning, but we will get the June 14-15th FOMC minutes at 2:00 PM ET. There is a possibility of the markets reacting to them, but I don't believe they will reveal a significant surprise that we did not get from the post-meeting statement, revised economic projections and press conference last month. Bond traders are looking for feelings about inflation and the size and frequency of planned rate hikes to control it. If there is a reaction, it will come during mid-afternoon hours.



ADP Employment

Tomorrow has two economic reports set for release, starting with June's ADP Employment report at 8:15 AM ET instead of the normal Wednesday release day. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report predicts changes in private-sector jobs, using the company's clients that use them for payroll processing as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. It is expected to show approximately 200,000 private sector jobs were added during the month. Bond traders would prefer to see a much smaller increase.



Weekly Unemployment Claims (every Thursday)

The weekly unemployment update is expected to reveal 234,000 new claims for unemployment benefits were filed last week, up from the previous week’s 231,000. Rising claims is a sign of employment sector weakness, meaning the higher the number tomorrow, the better the news it is for rates. It is worth reminding that this is only a weekly snapshot and does not carry the importance that many of the monthly reports do. In other words, it will take a noticeable variance from forecasts to directly influence mortgage rates. Plus, the markets will be much more focused on Friday’s monthly Employment report.

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.