Rate Lock Advisory
Sunday, June 3rd
This week is very light with only two pieces of monthly or quarterly economic data that are relevant to mortgage rates, neither of which is considered to be highly important. That raises the possibility of seeing mortgage rates remain much calmer than we saw the past couple of weeks.
Mortgage Rate Trend
Trailing 90 Days - National Average
Indexes Affecting Rate Lock
The first report will come from the Commerce Department at 10:00 AM tomorrow. They will post April's Factory Orders data that is similar to the Durable Goods Orders report that was released late last month. This release also includes orders for non-durable goods such as food and clothing. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn't expected to cause much of a change in rates. Current forecasts are calling for a 0.5% decline in new orders from March's level.
Productivity and Costs (Quarterly)
Revised 1st Quarter Productivity and Costs data from the first quarter will be posted early Wednesday morning. This data measures employee output and employer costs for wages and benefits. It is considered to be moderately important because it helps us measure wage inflation. Many analysts believe that the economy can grow with low inflationary pressures when productivity is high. Last month's preliminary reading revealed a 0.7% increase in productivity and a 2.7% increase in labor costs. Wednesday's update is predicted to show that productivity grew at a 0.6% annual rate while labor costs rose 2.8%. I don't think this piece of data will have much of an impact on the bond market or mortgage pricing unless it varies greatly from expectations.
The rest of the week will likely be driven by non-economic news such as tariff issues and Italy’s political situation as it is related to their potential exit from the European Union. It is highly unlikely that this week’s economic data will be the focal point in the markets. Overall, no day stands out as the most important, meaning we could see noticeable movement or little change in rates any day. Despite the light calendar, it would be wise to keep an eye on the markets and news if floating an interest rate as things could get active at anytime.
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.