Market Update

Lock

Float

Within 7 8-20 Days 21-60 Days Over 60 Days

Monday’s bond market has opened up slightly following favorable economic data to start the week.

Bonds are up, which means rates are slightly lower (bonds up 1/32)

•• What we're watching this week:

ISM Manufacturing data
Fed speeches this week
10-year Treasury auction
FOMC meeting
Economic data releases

Lock guidance:

Closing within 30 days -> locking makes sense

Longer timelines -> floating still reasonable

More updates as markets move.

Monday’s bond market has opened up slightly following favorable economic data to start the week. Stocks are mixed with the Dow down 170 points and the Nasdaq up 279 points. The bond market is currently up 1/32 (4.48%), which with a little strength late Thursday should improve this morning’s mortgage rates modestly. The financial and mortgage markets were closed Friday in observance of the Independence Day holiday.

Unlike most Mondays, we did get some relevant economic data this morning. The Institute for Supply Management (ISM) posted their June non-manufacturing index (aka service index) at 10:00 AM ET, revealing a reading of 54.0. This was lower than May’s 54.5 and a tad softer than the 54.3 that was expected. A decline in the index means fewer surveyed service sector executives felt business improved last month than did the previous month. As a sign of slower economic activity, we can label the report good news for mortgage rates.

There are no scheduled economic releases tomorrow or Wednesday morning. The remainder of the week brings us little to drive bond trading and mortgage rates. The calendar has just one monthly housing report, along with a couple of long-term Treasury auctions and the minutes from last month’s FOMC meeting midweek. This leaves outside factors such as Fed speeches and geopolitical headlines to drive trading some days.

Overall, we are expecting to see a fairly calm week for mortgage rates unless something unexpected happens. Wednesday is likely to be the most active day with the 10-year Treasury Note auction and FOMC minutes to influence them. Friday stands out as a good candidate for calmest since there is nothing scheduled that day. Even though there is little happening this week, it still would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future, just in case something hits the newswires.

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.