Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Positive

New Home Sales

April's New Home Sales report was posted early this morning, revealing a 16.6% drop in sales of newly constructed homes. Forecasts were calling for a much smaller decline, pointing to a softer than thought new home portion of the housing sector. While this news is favorable for bonds, it doesn’t carry enough significance to fuel this type of bond rally. Stock weakness and overnight gains are the driving forces behind this morning’s bond trading much more than this report.

High

Unknown

Durable Goods Orders

Tomorrow has three events that we will be watching, starting with April's Durable Goods Orders at 8:30 AM ET. It gives us an idea of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products, such as airplanes, appliances and electronics. Analysts are expecting to see an increase in new orders of 0.6%, hinting at the manufacturing sector strength. This data is known to be quite volatile from month to month. Therefore, a small variance from forecasts will likely have a minimal impact on tomorrow's mortgage rates. The smaller the rise in orders, the better the news it is.

Medium

Unknown

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

Also, we have the first of this week’s two relevant Treasury auctions taking place tomorrow. 5-year Treasury Notes are being sold tomorrow, followed by 7-year Notes Thursday. Neither of them will directly impact mortgage pricing, although they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to a slight upward revision to mortgage rates. On the other hand, strong sales usually make bonds more attractive to investors, bringing additional funds into the market. The buying that follows translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours tomorrow and/or Thursday.

Medium

Unknown

FOMC Meeting Minutes

Furthermore, the minutes from the May 3-4 FOMC meeting will be posted at 2:00 PM ET tomorrow afternoon. Market participants will be looking for how Fed members feel about inflation, the global economy and the size of future rate hikes. Because of recent public speaking engagements and such, we likely are not going to see too much in the minutes that we didn't already know. If there is a reaction, it will come during mid-afternoon trading tomorrow.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

New Home Sales

Durable Goods Orders

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

FOMC Meeting Minutes

Float / Lock Recommendation