Rate Lock Advisory

Thursday, July 2nd

Thursday’s bond market has opened in negative territory following the release of today’s key economic data. Stocks are rallying on the same data, pushing the Dow up 464 points and the Nasdaq up 145 points. The bond market is currently down 8/32 (0.70%), but we should see little change in this morning’s mortgage rates if comparing to Wednesday’s early pricing.



30 yr - 0.70%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Federal Open Market Committee (FOMC) Minutes

Yesterday’s afternoon release of the minutes from the June 9-10th FOMC meeting did not give us any big surprises. They showed that the Fed is prepared to keep key short-term interest rates at current levels for the foreseeable future and that there is a consensus that further financial assistance from Congress would be helpful in preventing a long-term pandemic impact on the economy. Bonds moved slightly lower in price after the minutes were posted at 2:00 PM ET, but it was not enough for lenders to revise rates higher before closing.



Employment Situation

Today’s major economic release was June’s Employment report at 8:30 AM ET that showed 4.8 million jobs were recovered during the month while the unemployment rate slipped to 11.1%. Forecasts were calling for 3.25 million new jobs and a 12.2% unemployment rate, making both readings bad news for bonds and mortgage rates as they indicate the employment sector was stronger than thought. While Treasury bonds have reacted negatively to the news, mortgage bonds have held steady. It is apparent that traders did not have a lot of faith in the forecasts, so this morning’s data didn’t come as a big surprise.



Weekly Unemployment Claims (every Thursday)

The second report of the morning was last week’s unemployment figures. They revealed that 1.427 million new claims for unemployment benefits were filed last week, down slightly from the previous week’s revised 1.482 million. However, they were still a little higher than expectations. That allows us to consider the data favorable for bonds and mortgage pricing as it points towards employment weakness.



Factory Orders

May's Factory Orders report was posted late this morning. It showed that new orders at U.S. factories jumped 8.0%, matching expectations. This is normally moderately important data because a good part of it is included in the Durable Goods Orders report that precedes this release. It has had no impact on today’s bond trading or mortgage rates.



Holiday Schedule

The bond market will close at 2:00 PM ET today while stocks are set for a full session. All the markets will be closed tomorrow for the Independence Day holiday and will reopen for regular trading Monday morning. The pre-holiday early close sometimes creates pressure in the bond market as traders look to protect themselves while U.S. markets are closed for the extended weekend. Because the markets will be closed and there is no relevant economic data scheduled for release, this report will not be updated tomorrow morning. Next week’s light calendar will be addressed 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... 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.