Rate Lock Advisory

Friday, May 22th

Friday’s bond market has opened flat following mixed economic data and no major Middle East headlines this morning. Stocks are looking to close the week on a positive note with the Dow up 295 points and the Nasdaq up 90 points. The bond market is currently unchanged, but noticeable gains during afternoon trading yesterday should allow for this morning’s rates to be lower than Thursday’s early pricing by approximately .250 of a discount point. If you saw an intraday improvement yesterday, you likely will see little change this morning.

0/32

Bonds

30 yr - 4.57%

295

Dow

50,580

90

NASDAQ

28,383

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Univ of Mich Consumer Sentiment (Rev)

The University of Michigan announced late this morning their revised May Index of Consumer Sentiment stood at 44.8. This was much lower than the 48.2 initial estimate from two weeks ago and indicates consumers were more concerned about their own financial and employment situations this month than many had thought. That is good news for bonds and mortgage rates because waning confidence usually translates into softer consumer spending, restricting overall economic growth. Bonds tend to thrive in weaker economic conditions, leading to lower yields and mortgage rates.

Medium

Negative

Leading Economic Indicators (LEI) from the Conference Board

Also at 10:00 AM ET this morning was the release of April's Leading Economic Indicators (LEI). The Conference Board announced an increase of 0.1%, meaning the indicators are predicting slightly stronger economic activity over the next three to six months. While that is considered modest growth, the fact that analysts were expecting to see a 0.3% decline makes the report bad news for bonds and mortgage rates.

Low

Unknown

Holiday Schedule

The bond market will close at 2:00 PM ET this afternoon ahead of Monday’s Memorial Day holiday. We sometimes see a bit of pressure in bonds just before an extended weekend as some investors look to protect themselves from potential headlines while the markets are closed longer than usual. This is especially true in times of elevated geopolitical tensions, but we aren’t expecting a noticeable move. Stocks will trade a full day today though. All markets will be closed Monday for the holiday and reopen Tuesday morning for regular trading hours.

Medium

Unknown

Consumer Confidence Index

Next week has a handful of economic reports and other events that we will be watching. With the markets closed Monday, the calendar begins Tuesday morning with the release of May’s Consumer Confidence Index. Thursday has the most important data scheduled, including the Fed’s preferred inflation readings. Look for details on all of next week’s relevant activities 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.

Brian L. A. Wess

Infinite Horizons Realty

2910 N. Powers Blvd, #174
Colorado Springs, CO 80922
Equal Housing OpportunityRealtor MLS
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