Rate Lock Advisory

Thursday, June 4th

Thursday’s bond market has opened in negative territory again despite somewhat favorable economic news. The major stock indexes are mixed with the Dow down 19 points and the Nasdaq up 21 points. The bond market is currently down 20/32 (0.81%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point if comparing to yesterday’s early pricing.



30 yr - 0.81%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were posted at 8:30 AM ET this morning, revealing that 1.877 million new claims for benefits were filed last week. That was in line with expectations of 1.8 million and down from the previous week’s 2.12 million new filings, but still shows significant issues in the employment sector. Over the past 11 weeks, more than 42 million people have filed for unemployment assistance as a result of the pandemic. Because weaker economic conditions usually hurt stocks and make bonds more appealing to investors, we can consider the data neutral to slightly favorable for mortgage rates.



Productivity and Costs (Quarterly)

Also posted early this morning were revised 1st quarter Productivity and Labor Cost numbers. They revealed that worker productivity was much stronger during the first three months of the year than previously estimated. Today’s report showed that productivity fell only 0.9% during the quarter after the initial release showed a 2.5% decline. Since stronger levels of productivity allow the economy to grow without rapid inflation, this revision is good news for bonds and mortgage rates. The bad news came in the other headline number-Unit Labor Costs. It was revised from up 4.8% to 5.1%, indicating labor-related costs rose more than previously thought. The mixed readings allow us to label the data neutral or a non-factor for mortgage pricing.



Employment Situation

Tomorrow morning brings us the almighty monthly Employment report for the month of May. This extremely important report will give us key employment readings such as the U.S. unemployment rate, the number of jobs added or lost during the month and average earnings change. Analysts are expecting to see the unemployment rate jump to almost 20% with approximately 8 million jobs lost during the month. A higher than expected unemployment rate and a much larger decline in payrolls would be favorable news for the bond market and mortgage rates.

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.