Rate Lock Advisory

Monday, May 16th

Monday’s bond market has opened in positive territory with stocks showing early losses and little else to drive trading. The Dow is currently down 132 points while the Nasdaq has lost 69 points. The bond market is up 13/32 (2.88%), which should keep this morning’s mortgage rates close to Friday’s early pricing.



30 yr - 2.88%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock




There is nothing of importance scheduled for today other than an early morning Fed speaking engagement that was uneventful. The rest of the week brings us the release of five relevant monthly economic reports, one of which is considered to be highly important. There is also a Treasury auction and slew of Fed speeches that may come into play.



Retail Sales

Activities start tomorrow morning with two economic reports, one being the highly important Retail Sales report for April. This is an extremely relevant report because it measures consumer spending, which makes up over two-thirds of the U.S. economy. Analysts are expecting a 0.9% increase in sales from March to April. A smaller increase should push bond prices higher and mortgage rates lower tomorrow morning as it would be a sign the economy is not as strong as thought. Bad news for rates would be a larger increase in sales.



Industrial Production

Tomorrow’s second piece of data will be April's Industrial Production report at 9:15 AM ET. It shows manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are predicting a 0.5% rise in production, indicating that manufacturing activity is strengthening moderately. This report draws some attention but not nearly the same level that the sales data does, meaning the sales report will have a much bigger impact on rates than this one will.



Fed Talk

We also have plenty of Fed talk to listen to this week, including from Fed Chairman Powell tomorrow afternoon. He will be speaking at a Wall Street Journal conference and is expected to speak at 2:00 PM ET. The hot topics traders are looking for are thoughts on inflation and the size of the Fed’s future increases to key short-term interest rates to help control it.



Stock Influences

The most important day for rates is tomorrow due to the significance of the Retail Sales report and Chairman Powell speaking publicly. The calmest day may be Friday unless something unexpected happens. It is still corporate earnings season with some big-named retail companies reporting this week. Disappointing results, indicating consumers are spending less, should hurt stocks, boost bonds and lead to lower mortgage rates. There is no reason to believe that this will be a quiet week for rates. Therefore, please keep an eye on the markets if 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... Float 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.