May 1st, 2023 7:02 PM by T. Fanning
Hi, happy May Day!
Rates began the week on an up note. Overall, it is going to be an interesting week for the markets and mortgage rates. We can expect to see plenty of movement in rates Wednesday afternoon and Friday morning due to the importance of the FOMC meeting and Employment report. Due to the number of highly-influential events taking place this week, it would be prudent to keep a close eye on the markets if still floating an interest rate and closing in the near future.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional, FHA and VA 1x Close Construction-Perm; 1.50% Down FHA Advantage Program; CHFA Financing; HomeStyle renovation program; and a Jumbo, 5% down program. We can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 5/1/23
Monday's bond market has opened well in negative territory following bank news and stronger than expected economic data. Stocks are calm, especially considering the banking headlines. The major indexes are mixed with the Dow up 48 points and the Nasdaq down 10 points. The bond market is currently down 24/32 (3.52%), which should push this morning's mortgage rates higher by approximately .250 of a discount point if compared to Friday's early pricing.
The Institute for Supply Management (ISM) released their April manufacturing index at 10:00 AM ET this morning, announcing a 47.1 reading. This was an increase from March's 46.3, indicating strength in the manufacturing sector. In addition to the increase, it was also higher than forecasts (46.8), meaning the reading is bad news for bonds and mortgage rates.
The First Republic Bank headlines (taken over and sold) are failing to fuel a bond rally, even though they are the largest bank collapse dating back to 2008. As feared, traders are treating it as old news. In other words, it was somewhat expected to happen sooner or later after they were given lifeline funding back in March. Market participants will certainly be interested if other bank issues arise, but for the time being, it is not helping the bond market.
We have four more monthly and quarterly economic reports remaining this week, including the highly influential Employment report Friday. There is also another FOMC meeting taking place that may cause some fireworks midweek. Each day has a single report set for release, meaning mortgage rates should be fairly active throughout the week.
March's Factory Orders report will be posted late tomorrow morning. This data is similar to the Durable Goods Orders report that was posted last week, except it includes orders for both durable and non-durable goods. It will also give us a measurement of manufacturing sector strength but is considered to be only moderately important to the bond and mortgage markets. That is partly because a big portion of the data was already released with the Durable Goods Orders report. The report will likely have a minimal impact on mortgage rates, even if it shows a much smaller than expected 1.4% increase in orders.
Overall, it is going to be an interesting week for the markets and mortgage rates. We can expect to see plenty of movement in rates Wednesday afternoon and Friday morning due to the importance of the FOMC meeting and Employment report. Due to the number of highly-influential events taking place this week, it would be prudent to keep a close eye on the markets if still floating an interest rate and closing in the near future.
If I were considering financing/refinancing a home, I would.... Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Lock if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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