Rate Lock Advisory

Sunday, July 3rd

We only have three monthly reports to watch this week, but one of them is considered to be a key release. In addition to the few reports, the minutes from last month’s FOMC meeting will also be posted mid-week. The week starts with the markets closed for the Independence Day holiday tomorrow. The bond and stock markets will reopen for regular trading hours Tuesday. Accordingly, there will be no update to this report tomorrow.

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Bonds


Market Closed

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Dow


Market Closed

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NASDAQ


Market Closed

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium


Unknown


Factory Orders

Relevant activities will begin Tuesday morning when the Commerce Department posts May's Factory Orders data. It is similar to the Durable Goods Orders report that was released last week but covers both durable and non-durable goods. This report usually doesn't have as much of an impact on the bond market as the durable goods data does. There is no reason to believe this report will heavily influence the markets or mortgage pricing. Current expectations are showing a 0.5% rise in new orders from April's levels. A noticeably smaller increase could cause a minor improvement in pricing.

Medium


Unknown


FOMC Meeting Minutes

Minutes from the June 14-15th FOMC meeting are next. They will be posted at 2:00 PM ET Wednesday, making this an afternoon event for rates. 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 Wednesday.

Medium


Unknown


ADP Employment

June's ADP Employment report will be posted at 8:15 AM ET Thursday 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 195,000 private sector jobs were added during the month. Bond traders would prefer to see a much smaller increase.

High


Unknown


Employment Situation

The big news of the week will be the June’s Employment report at 8:30 AM ET Friday. This highly important report will tell us June's unemployment rate, number of new payrolls added or lost and some earnings figures. These are considered to be extremely important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, a large decline in payrolls and no change in earnings. Weaker than expected readings would likely help boost bond prices and lower mortgage rates Friday. However, stronger numbers could be extremely detrimental to mortgage pricing. Analysts are expecting to see the unemployment rate hold at 3.6% and 260,000 jobs added to the economy last month, while earnings rose 0.3%. A higher unemployment rate, fewer new jobs and a smaller increase in earnings would be considered favorable news for rates.

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Unknown


none

Overall, Friday is best candidate for most important day for rates, but Wednesday afternoon may also be noticeably active if the FOMC minutes show some surprises. No day stands out as likely to be calm. Even though Tuesday has the least important report of the week, the markets often are active following a long holiday weekend. While we likely will not see the movement in rates we saw last week, there a couple days that could bring some volatility. Therefore, 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... 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.


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