Rate Lock Advisory

Thursday, May 5th

Thursday’s bond market has opened in negative territory despite a piece of favorable economic news. The stock markets are showing relatively minor gains with the Dow up 53 points and the Nasdaq up 2 points. The bond market is currently down 3/32 (1.78%), which should keep this morning’s mortgage rates at yesterday’s levels.

3/32


Bonds


30 yr - 1.78%

53


Dow


17,705

2


NASDAQ


4,727

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Low


Positive


Weekly Unemployment Claims (every Thursday)

Today’s only economic news was last week’s unemployment update that showed 274,000 new claims for unemployment benefits were filed. This was an increase from the previous week’s 257,000 new claims and exceeded forecasts of 259,000. This is good news for the bond and mortgage markets because it indicates the employment sector softened last week. Unfortunately, this is only a weekly report, so its impact on today’s trading has been minimal.

High


Unknown


Employment Situation

Tomorrow brings us only one piece of data but it is a major report that is usually a market mover. At 8:30 AM ET tomorrow, the Labor Department will post March's Employment report. It will give us the U.S. unemployment rate, the number of jobs added or lost during the month and average earnings. It is expected to show that the unemployment rate was unchanged at 5.0% and that approximately 207,000 payrolls were added to the economy during the month. A higher unemployment rate and a much smaller than expected payroll number would be good news for bonds and would likely push mortgage rates lower tomorrow morning because it would indicate weaker than thought conditions in the employment sector of the economy. However, stronger than expected results would probably fuel a stock rally and bond selling that leads to a sizable increase in mortgage pricing.

---


Unknown


None

Tomorrow is likely to be a pretty active day. It is my guess that the payroll number will come in light, making the report favorable for rates. But that is just speculation, so please proceed cautiously if still floating an interest rate as a stronger number could cause rates to spike higher.

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.