Rate Lock Advisory

Tuesday, June 22th

Tuesday’s bond market has opened up slightly as traders prepare for today's Fed appearance. Stocks are showing losses of 112 points in the Dow and 16 points in the Nasdaq. The bond market is currently up 2/32 (1.49%), which with gains late yesterday should improve this morning's mortgage rates by approximately .125 of a discount point.

2/32

Bonds

30 yr - 1.49%

112

Dow

33,764

16

NASDAQ

14,124

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Neutral

Existing Home Sales from National Assoc of Realtors

The National Association of Realtors kicked off this week’s economic calendar with the release of their Existing Home Sales report for May at 10:00 AM ET. They announced a slight decline in home resales, hinting at a softening housing sector. Forecasts were calling for a larger decline, but it was not enough of a variance to make a difference in bond trading or mortgage pricing.

High

Unknown

Fed Talk

Later today, Fed Chairman Powell will appear before a House of Representatives subcommittee as part of the Coronavirus Aid package. He will update Congress on the status of the economic recovery from the pandemic and what the Fed is doing to assist. There is a good possibility of seeing the markets react to his words. He will be speaking at 2:00 PM ET, meaning this will be an afternoon event for rates.

Low

Unknown

New Home Sales

May's New Home Sales report is set for release at 10:00 AM ET tomorrow. This report also helps us measure housing sector strength by tracking sales of newly constructed homes. It is the sister release to the Existing Home Sales report but covers a much smaller portion of sales than today's release. Tomorrow's version is also expected to show a decline in sales, although it will likely not have much of an impact on mortgage rates because this data gives such a small snapshot of the housing sector.

Medium

Unknown

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

Tomorrow also has the first of this week’s two Treasury auctions that we will be watching. They both have the potential to affect bond trading enough to alter rates slightly. The key is how strong investor interest is in the securities. 5-year Notes will be sold tomorrow while 7-year Notes go Thursday. If they are met with a strong demand from investors, we could see bond prices rise and mortgage rates improve slightly during afternoon trading. On the other hand, if the sales draw a lackluster interest from investors, mortgage rates may move slightly higher during afternoon trading those days.

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.

Pathfinder Real Estate Services Inc.

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