Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

Fed Talk

There is no economic data set for release tomorrow or Tuesday. This week has a large number of Fed-member speaking appearances that could yield a surprise comment or two. Most of them list topics that are not of concern and will not produce headlines. However, a few do reference key topics in their titles, such as economic outlook and monetary policy. Tomorrow has two of these that will draw more attention than the others. One is scheduled for 9:00 AM ET and the other at 10:30 AM ET. We don’t expect to hear something that will cause a strong reaction in the markets tomorrow, but the possibility does exist.

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

The week’s economic calendar begins late Wednesday morning when April's Existing Home Sales data from the National Association of Realtors is posted. This data tracks home resales in the U.S. and will give us an idea of housing sector strength. Housing data is relevant because a weakening housing sector makes broader economic growth less likely. Current forecasts show a small increase in sales last month, pointing to a slightly stronger housing sector. Good news for rates would be a large decline in sales.

Medium

Unknown

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

Wednesday also has two afternoon events that we will be watching. First will be results of the 20-year Treasury Bond auction at 1:00 PM ET. This sale will not directly impact mortgage pricing, although they can influence general bond market sentiment. If the auction goes poorly, we could see broader selling in the bond market that leads to a slight upward revision to mortgage rates. On the other hand, a strong demand from investors usually translates into bond gains and slightly lower mortgage rates. Look for any reaction to come during early afternoon hours Wednesday.

Medium

Unknown

FOMC Meeting Minutes

We will also get the minutes from the April 31 – May 1 FOMC meeting Wednesday afternoon. Market participants will be looking for how Fed members feel about inflation, employment, economic growth and their thoughts about future monetary policy moves. We likely are not going to see too much in the minutes that we don't already know, but the possibility does exist. They will be released at 2:00 PM ET. If there is a reaction, it will come during midafternoon trading Wednesday.

Low

Unknown

New Home Sales

Thursday’s sole monthly report will be April's New Home Sales report at 10:00 AM ET. This data gives us a small measurement of housing sector strength and mortgage credit demand by tracking sales of newly constructed homes. Most sales in the U.S. will be covered under Wednesday’s Existing Home Sales report, meaning this version probably will not have much of an impact on mortgage pricing. Analysts are expecting to see a decline in sales from March's level, indicating the new home portion of the housing sector softened last month. Bond traders would prefer to see a large decline in sales.

High

Unknown

Durable Goods Orders

Friday morning has two pieces of economic data set for release, starting with April's Durable Goods Orders at 8:30 AM ET. Durable goods are big-ticket products that are made with an expected life span of three or more years, such as airplanes, appliances, and electronics. It is expected to show a decline of 0.5% in new orders, hinting the manufacturing sector weakened last month. 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 mortgage rates. The larger the decline in orders, the better the news for rates.

Medium

Unknown

Univ of Mich Consumer Sentiment (Rev)

The last mortgage-related data of the week will come from the University of Michigan late Friday morning when they update their Index of Consumer Sentiment for May. This type of data is watched fairly closely because when consumers are feeling more confident about their own financial situations, they are more likely to make a large purchase in the near future. Rising confidence and the higher levels of spending that usually follow are considered negative news for bonds and mortgage rates. Friday's report is expected to show a slight upward revision from this month's preliminary reading of 67.4. A higher reading would be considered bad news for bonds and mortgage pricing while a large downward revision should help boost bond prices and lead to a slight improvement in rates.

Low

Unknown

Holiday Schedule

Also worth noting Friday is the early close for the bond market ahead of next Monday's Memorial Day holiday. The bond market will close at 2:00 PM ET Friday while stocks trade for a full day. All markets will be closed the following Monday for the holiday. We sometimes see a bit of volatility in bonds in these situations as traders look to protect themselves over the three-plus day weekend.

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Unknown

none

Overall, while no single day clearly stands out as more important for rates than any other, we could see the biggest change Friday morning. This is assuming that tomorrow’s Fed speeches are uneventful. The best candidate for calmest day is Thursday. We should see far less movement in rates this week than during the past couple of weeks, but the markets can get active without notice. Therefore, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Talk

Existing Home Sales from National Assoc of Realtors

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

FOMC Meeting Minutes

New Home Sales

Durable Goods Orders

Univ of Mich Consumer Sentiment (Rev)

Holiday Schedule

none

Float / Lock Recommendation