Rate Lock Advisory

Thursday, May 14th

Thursday’s bond market has opened in positive territory following somewhat favorable economic data. Stocks are showing early strength also with the Dow up 283 points and the Nasdaq up 74 points. The bond market is currently up 5/32 (4.44%), which with a little strength late yesterday should improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.

5/32

Bonds

30 yr - 4.44%

283

Dow

49,978

74

NASDAQ

26,476

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

High

Neutral

Retail Sales

April’s Retail Sales report was posted at 8:30 AM ET this morning. It revealed consumer spending rose 0.5% last month, matching forecasts. A secondary reading that excludes more costly and volatile auto transactions was a little stronger than expected at up 0.7%. The increases are being attributed to higher costs for fuel and other related purchases, meaning figures may have been noticeably lower if effects of the Iran war were removed. Since there are no major surprises in the data, we are labeling it neutral for mortgage rates.

Medium

Positive

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were also released early this morning, showing 211,000 new claims for jobless benefits were made. This was an increase from the previous week’s revised 199,000 initial filings and higher than the 206,000 that was expected. We can consider the report favorable news for bonds and mortgage pricing because rising claims are a sign the employment sector is softening. This is only a weekly snapshot of the sector, so it doesn’t carry a high level of influence in the markets. Still, today’s update was good news for rates.

Medium

Unknown

Geopolitical/Financial Issues

We will also be watching for headlines from President Trump’s summit in China, but considering the difference in time zones, any news will likely come during late morning trading. Topics that are most relevant to bonds and mortgage rates are related to tariffs and geopolitical situations such as the Strait of Hormuz and energy costs that affect inflation. Lower tariffs on imported and exported goods would ease inflation fears a bit, especially after we got two concerned reports just this week that indicated some metrics were at multi-year highs, as will any agreement that will help shipping through the strait.

Medium

Unknown

Industrial Production

This week’s economic activities will come to a close tomorrow with the release of April's Industrial Production report at 9:15 AM ET. It gives us an indication of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts show a 0.2% increase in production, indicating that manufacturing activity strengthened slightly last month. This report draws some attention but not nearly the same level as most of the other reports that were released this week. Accordingly, we shouldn’t see a strong reaction to the data regardless of what it shows.

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.

Amity Mortgage LLC

Your friends in the mortgage business.

185 Meadow St
Naugatuck, CT 06770
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