Rate Lock Advisory

Monday, June 1st

Monday’s bond market has opened in negative territory even though stocks are relatively calm and this morning’s big economic report nearly matched expectations. The major stock indexes are currently showing minor gains of 49 points in the Dow and 38 points in the Nasdaq. The bond market is currently down 10/32 (0.68%), but decent gains late Friday should keep this morning’s mortgage rates close to Friday’s early pricing. Many lenders improved pricing late Friday as bonds rallied. If you saw an afternoon improvement Friday, you likely will see an increase by the same amount this morning.



30 yr - 0.68%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



ISM Index (Institute for Supply Management)

Unlike many Mondays, we did get some relevant economic data this morning and it was a fairly big release. The Institute for Supply Management (ISM) posted their manufacturing index at 10:00 AM ET this morning, announcing a reading of 43.1. This was an increase from April’s 41.5 that was the lowest since April 2009 and shows that manufacturing activity improved a little in May. We shouldn’t be surprised by the increase though, considering states and businesses were starting to reopen during the month. And the index is still well below the 50.0 threshold that is considered the benchmark for growth or contraction in the sector. In other words, while there was an improvement in sentiment, it still shows serious weakness overall. Therefore, we can consider the data neutral to slightly favorable for mortgage rates.




Tomorrow does not have something of relevance scheduled for release, the only day of the week without at least one report. The rest of the week has four more monthly and quarterly economic reports scheduled in addition to the weekly unemployment update. The week’s scheduled events make it safe to assume that we will have an active week for the financial markets and mortgage rates.




Overall, Friday is the most important day of the week due to the significance of the Employment report, but today’s ISM report is also considered to be of high importance. The calmest day for rates may be tomorrow unless something unexpected happens. With some very important data on tap this week, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

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.