Rate Lock Advisory

Friday, June 26th

Friday’s bond market has opened in positive territory again even though this morning’s sole relevant economic report gave us unfavorable results. Stocks are fairly calm with the Dow nearly unchanged from yesterday’s close and the Nasdaq down 44 points. The bond market is currently up 2/32 (4.38%), which should keep this morning’s mortgage rates close to Thursday’s early pricing. If you saw an upward revision before closing yesterday, you should see an improvement this morning of the same size.

2/32

Bonds

30 yr - 4.38%

1

Dow

51,920

44

NASDAQ

25,314

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Negative

Univ of Mich Consumer Sentiment (Rev)

Today’s only economic data came from the University of Michigan who announced their revised Index of Consumer Sentiment for June stands at 49.5. This was an increase from the initial reading of 48.9 two weeks ago and higher than forecasts. The increase means surveyed consumers felt better about their own financial and employment situations than previously thought. Since rising confidence usually translates into stronger levels of consumer spending that makes up over two-thirds of the U.S. economy, we have to consider the report bad news for bonds and mortgage rates.

Medium

Positive

Geopolitical/Financial Issues

It is not the sentiment data that is causing this morning’s modest gains in bonds. We are likely seeing a positive reaction to news that more ships are passing through the Strait of Hormuz despite word that one came under attack yesterday. As ships are able to pass through the strait, oil prices are falling, easing inflation concerns. This makes bonds more appealing to investors and also raises the possibility that the Fed may be able to avoid raising key rates at one of their upcoming FOMC meetings.

High

Unknown

Employment Situation

Next week brings us more important economic data, including the batch of new month reports such as the ISM manufacturing index Wednesday and the almighty monthly Employment report Thursday. It will be a holiday-shortened week with the markets closed Friday for the Independence Day holiday. The bond market will close early Thursday also. The week starts light with nothing of importance scheduled for Monday and gets more relevant as it progresses. Activities include a public discussion in Europe about monetary policy that Fed Chairman Warsh is participating in Wednesday morning. Look for details on all of next week’s events in Sunday evening’s weekly preview.

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.

RTC Mortgage Corporation

1000 N. Coast Highway, #7
Laguna Beach, CA 92651
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NMLS: 288939 BRE: 01117142



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