Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Positive

New Home Sales

The first of today’s three scheduled events was the release of May's New Home Sales report. It revealed a 13.7% drop in sales of newly constructed homes. This was much weaker than expected and the lowest number of sales in seven months. As a sign of weakness in the housing sector, we can label the report good news for rates. The truth is though, this report covers such a small portion of all home sales in the U.S. that its results often have no impact on rates.

Low

Unknown

Misc Fed

Fed Chairman Powell has started day two of his semi-annual congressional update this morning. Today he is speaking before the Senate Banking Committee after doing so yesterday in front of the House Financial Services Committee. No fireworks or major surprises are expected from this event, partly because his opening statement on day two usually mimics what he said on day one. If there are any surprises, it will come during the Q&A portion of the event.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

We also have the results of today’s 5-year Treasury Note auction to watch. They will be posted at 1:00 PM ET, making this an early afternoon event for rates. If there was a strong demand for the securities, we could see afternoon bond gains and possibly a slight improvement in mortgage rates before closing. However, if investor demand was weak, don’t be surprised to see a bit of pressure in bonds that may lead to an upward revision to rates this afternoon. This scenario will be repeated tomorrow when 7-year Note are auctioned.

High

Unknown

Durable Goods Orders

Tomorrow morning has three 8:30 AM ET economic releases, followed by the early afternoon auction results. First will be May's Durable Goods Orders report that will give us an indication of manufacturing sector strength by tracking orders at U.S. factories for products such as airplanes, appliances and electronics. This data is known to be quite volatile from month to month, so a moderate variance from expectations is not as meaningful as it is in other reports. Forecasts show a 7.0% jump in May's new orders. A much smaller increase would be good news for mortgage pricing.

Low

Unknown

GDP Rev 2 (month after Rev 1)

The second revision to the 1st Quarter Gross Domestic Product (GDP) reading is also set for release. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this particular data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month's release of the current quarter's initial GDP reading. Tomorrow's update is expected to match the initial revision that the economy contracted at a 0.2% annual rate. A large upward revision in the GDP would be considered negative for rates as it means the economy was stronger than thought.

Medium

Unknown

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment update is tomorrow’s third report. Forecasts have it showing 245,000 new claims for jobless benefits were made, matching the previous week. Good news for rates would be a higher number because rising claims are a sign of employment sector weakness.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

New Home Sales

Misc Fed

Treasury Auctions (5,7,10,20,30 year)

Durable Goods Orders

GDP Rev 2 (month after Rev 1)

Weekly Unemployment Claims (every Thursday)

Float / Lock Recommendation