Rate Lock Advisory

Friday, June 5th

Friday’s bond market has opened sharply lower following a huge surprise in this morning’s sole economic report. Stocks are reacting to the same report, pushing the Dow up 703 points and the Nasdaq up 154 points. The bond market is currently down 31/32 (0.92%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point.



30 yr - 0.92%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Employment Situation

This morning’s major economic news was the release of May’s Employment report at 8:30 AM ET. It revealed that the U.S. unemployment rate stood at 13.3% last month, down from April’s 14.7%. Forecasts were all calling for an increase, not a decline, with the consensus above 19%. The other shocking number was the 2.51 million jobs recovered during the month when approximately 8 million jobs were thought to be lost. These numbers indicate that the employment sector, and possibly the overall economy, are in much better shape than previously thought.



Employment Situation

It is worth noting that the unemployment rate is still at a terribly high 13.3% and it is unclear how the Paycheck Protection Program (PPP) is affecting these numbers. Those loans are starting to run out now while the report’s data was compiled back in the week of May 12th. It will be interesting to see what June’s numbers look like when more businesses have fully reopened and no longer have free payroll for 100% of their employees.



Employment Situation

For today though, the report was incredibly bad news for bonds and mortgage rates. At the same time, it also acts as fuel to extend the recent stock market rally that many were beginning to question. That said, mortgage bonds are well off their earlier lows after the initial knee-jerk reaction to the headlines. That has helped to limit the amount of an increase in this morning’s mortgage rates. Hopefully, this will hold throughout the day to keep rates at this morning’s levels. If they do move back towards this morning’s low points, we will likely see an intraday increase to mortgage rates.




Next week has only a couple of monthly economic reports scheduled that are expected to affect rates in addition to another FOMC meeting and two Treasury auctions. There is nothing of importance scheduled for Monday, meaning we can expect weekend headlines to drive trading as the new week begins. Look for details on next week’s calendar 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.