Rate Lock Advisory

Monday, May 13th

Monday’s bond market has opened in positive territory to start the week with a slight improvement in rates. Stocks are also showing early gains, pushing the Dow up 99 points and the Nasdaq up 31 points. The bond market is currently up 7/32 (4.47%), which should improve this morning’s mortgage rates by approximately .125 of a discount point if compared to Friday’s early pricing.

7/32

Bonds

30 yr - 4.47%

99

Dow

39,611

31

NASDAQ

16,372

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Unknown

None

There is no relevant economic data scheduled for release today. The rest of the week has six monthly economic reports set to be posted, three of which are considered to be extremely important to the financial and mortgage markets. Throughout the week there is an abundance of Fed speeches that may come into play also. Midweek has the most influential items scheduled.

High

Unknown

Producer Price Index (PPI)

Activities begin tomorrow morning with the 8:30 AM ET release of April's Producer Price Index (PPI). This highly important report measures inflation at the producer level of the economy. These results are watched closely because rising inflation makes long-term securities, such as mortgage-related bonds, less attractive to investors and causes the Fed to be reluctant to begin lowering key short-term interest rates. The overall reading is expected to have risen 0.3% while the more important core data that excludes volatile food and energy costs is predicted to show a 0.2% increase. Favorable news for bonds and mortgage rates will be smaller increases.

Medium

Unknown

Fed Talk

In addition to this week’s data, we have quite a large number of Fed-member speaking appearances scheduled. There are multiple speeches being made most days and Fed Chairman Powell is involved in one late tomorrow morning. These speeches often are about mundane topics, but sometimes they involve discussions about the economy, inflation and how the Fed reacts to those matters. Any surprise comments, particularly about the Fed’s future plans with key interest rates, could cause a strong reaction in the financial and mortgage markets. With so many scheduled this week, don’t be surprised to see an intraday reaction in the bond market at least one day.

High

Unknown

Consumer Price Index (CPI)

Overall, Wednesday is the most important day of the week for rates due to the significance of the Consumer Price Index (CPI) and Retail Sales reports that are being released. They will likely heavily contribute to the direction of mortgage rates this week. The calmest day is expected to be Friday unless something unexpected happens. If still floating an interest rate and closing in the near future, it would be prudent to keep an eye on the markets as we should see plenty of movement in them and mortgage rates this week.

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.

Marianne L. Lilly - RE/MAX Harbor Realty

2815 Tamiami Trail
Punta Gorda, FL 33950
Equal Housing Opportunity
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