Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Positive

Housing Starts (New Home Construction)

May's Housing Starts data was posted at 8:30 AM ET this morning, revealing a 15.4% decline in new home groundbreakings. This was a much larger decline than was expected and the fewest number of starts since May of 2020. The large overall drop is being attributed to a significant decline in multi-family groundbreakings, such as apartments and condos. Mortgage rates are more sensitive to data relating to single-family homes than apartments, but as a sign of economic weakness, we can still label the report favorable for rates even though it hasn’t had an obvious impact on this morning’s rates.

Medium

Unknown

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

There is also a 20-year Treasury Bond auction taking place today with results expected to be made available at 1:00 PM ET. These types of sales give us an indication of investor demand for long-term securities, which is relevant because mortgage rates are based on long-term debt. If the results show a high level of interest in the securities, we could see afternoon gains in bonds that lead to a slight improvement in mortgage pricing. On the other hand, a weak sale could contribute to an upward revision in rates before the end of the day.

High

Unknown

Retail Sales

Tomorrow has the potential to be a very interesting day for the financial and mortgage markets. It will start with the release of May's Retail Sales report at 8:30 AM ET. This data is considered to be highly important to the financial and mortgage markets because it gives us insight into consumer spending habits and that category makes up over two-thirds of the U.S. economy. Analysts are expecting to see a 0.5% rise in sales and a 0.6% increase if more costly and volatile auto transactions are excluded. Good news for bonds and mortgage rates would be weaker spending numbers since softer consumer spending restricts economic growth, making bonds more appealing to investors.

High

Unknown

Federal Open Market Committee (FOMC) Statement

The FOMC meeting will adjourn at 2:00 PM ET tomorrow afternoon. There is a strong consensus that the Fed will leave key short-term interest rates unchanged at this meeting despite much debate about a potential rate increase soon. The post-meeting statement could cause some negative volatility if it appears to confirm that theory, but the recently announced Iran peace deal lowers the likelihood of that happening since an open Strait of Hormuz should ease gas and energy costs. This meeting includes revised economic projections such as overall economic growth (GDP), unemployment and inflation predictions. We will also get their so-called dot-plot that tells us where individual Fed members feel key rates will be in the future. They will be followed by a 2:30 PM ET press conference with the newly appointed Chairman Warsh.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Housing Starts (New Home Construction)

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

Retail Sales

Federal Open Market Committee (FOMC) Statement

Float / Lock Recommendation