Rate Lock Advisory

Monday, May 23th

Monday’s bond market has opened in negative territory to start the new week. The major stock indexes are mixed with the Dow up 248 points and the Nasdaq down 42 points. The bond market is currently down 6/32 (2.81%), but gains Friday afternoon should allow this morning’s mortgage rates to be approximately .125 of a discount lower.

6/32

Bonds

30 yr - 2.81%

248

Dow

31,510

42

NASDAQ

11,312

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Unknown

Stock Influences

There is nothing of importance taking place today. Expect to see bonds move with stocks a good part of the day. If the major indexes move higher, bonds will likely remain in negative ground. However, if stocks retreat throughout the day, it is a safe bet that funds will move into bonds, possibly leading to a slight improvement to rates before closing.

Medium

Unknown

None

The rest of the week brings us the release of five relevant monthly and quarterly economic reports for the markets to digest in addition to a couple of potentially relevant Treasury auctions and the FOMC minutes. None of the reports are considered to be key to the markets, although a couple are considered to be highly important.

Low

Unknown

New Home Sales

Activities will begin late tomorrow morning when April's New Home Sales report is released. This data gives us a small measurement of housing sector strength and mortgage credit demand by tracking sales of newly constructed homes. Most sales in the U.S. are covered under the Existing Home Sales report that was posted last week, meaning this version probably will not have much of an impact on mortgage pricing. Analysts are expecting to see a decline in sales from March's level, indicating the new home portion of the housing sector softened last month. Bond traders would prefer to see a large decline in sales.

High

Unknown

Durable Goods Orders

Overall, Wednesday is a good candidate for the most important day for rates due to the potential influence of the Durable Goods Orders report and FOMC minutes. Thursday also may be active if the GDP reading is revised noticeably. With so much going on this week, 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.

Excel Funding Real Estate Services, Inc.

28924 South Western Avenue, Suite 110
Rancho Palos Verdes, CA 90275
Equal Housing Opportunity
DRE #01194971 / NMLS #330182
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