Rate Lock Advisory

Friday, July 1st

Friday’s bond market has opened significantly higher following weaker than expected economic data both here and internationally. Stocks are having a muted response to the headlines with the Dow down 11 points and the Nasdaq up 43 points. However, the bond market is currently up 57/32 (2.80%), which should equate to an improvement in this morning’s mortgage rates of approximately .750 – 1.000 of a discount point.



30 yr - 2.80%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



ISM Index (Institute for Supply Management)

Today’s only relevant economic data was June’s manufacturing index from the Institute of Supply Management (ISM). They announced a reading of 53.0 that was weaker than the 55.0 that was predicted and a decline from May’s 56.1. The lower reading means surveyed manufacturing executives felt business conditions were not as good as they were last month, making it good news for rates. Today’s decline also brings the index closer to an extremely important threshold of 50.0. A reading below 50.0 is an indication the manufacturing sector contracted during the month rather than expanded. This possibility will be discussed as we near the release date of July’s reading.



Geopolitical/Financial Issues

While today’s ISM index is considered to be a major report and gave us favorable results, it is not the sole reason for this morning’s huge bond rally. Bonds were posting sizable gains during overnight trading and the morning hours before the report was posted. After it was announced, we saw bonds make another move higher, contributing to this morning’s large improvement in rates.



Holiday Schedule

The bond market will close at 2:00 PM ET today ahead of Monday's Independence Day holiday and will reopen for regular trading Tuesday morning. Stocks will trade a full day today but be closed Monday also. 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. It shouldn’t be a major influence on rates though. If it does come into play, the impact should be minor on this afternoon’s mortgage pricing.




Next week doesn’t have a large number of economic reports for the markets to digest, but most of what is set for release is considered to be important. It starts with Factory Orders Tuesday morning and closes with the almighty monthly Employment report Friday. In between we will get the ADP private-sector Employment report and the minutes from last month’s FOMC meeting. Despite the small number of scheduled events, we still should see noticeable movement in rates. Look for details on all of next week’s activities 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... 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.

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