Rate Lock Advisory

Wednesday, June 12th

WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting has adjourned with an announcement of no change to key short-term interest rates. This was widely predicted and has had no impact on this afternoon’s trading. However, their predictions for key rates point towards just one rate cut this year, down from three. Eight voting members predicted 2 cuts before yearend while seven said there will be just 1 reduction and four forecasted there will not be a rate cut in 2024. A bit of good news came in 2025’s prediction where the consensus was the Fed would lower rates 4 times instead of the previous estimate of 3 moves.



30 yr - 4.30%







Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock



Federal Open Market Committee (FOMC) Statement

Their revised economic projections adjusted their outlook for inflation, raising the annual rate prediction for this year from 2.6% to 2.8%. They held their forecasts for unemployment and overall GDP growth at 4.0% and 2.1% respectively.




The markets have reacted negatively to this afternoon’s events. The Dow has given back all of its morning gains and then some to currently show a loss of 28 points, while the Nasdaq has been much less responsive, now up 292 points. The bond market is still well in positive territory at up 25/32 (4.30%), but it had actually improved from this morning level during late morning and early afternoon trading. There has not been enough of a slide for mortgage rates to revise lower intraday, at least not at this point. If the trend continues, which is quite possible, we could see an upward revision to rates before closing today.



Consumer Price Index (CPI)

This morning’s big economic news was the release of May’s Consumer Price Index (CPI) that revealed retail-level inflation was a bit softer than expected. The overall reading for May was unchanged compared to forecasts of up 0.1%. The more important core data that excludes volatile food and energy prices rose only 0.2% when it was expected to rise 0.3%. Year over year readings followed suit with the overall index slipping 0.1% and core inflation falling 0.2% annually.



Producer Price Index (PPI)

Tomorrow morning brings us two pieces of relevant economic data at 8:30 AM ET. The more important of the two will be May’s Producer Price Index (PPI) that is similar to today’s CPI but measures inflation at the producer level of the economy instead of retail. Forecasts have the overall reading rising 0.1% and core data up 0.3%. If tomorrow’s report shows further indication that inflation is easing, we should see mortgage rates move lower again.



Weekly Unemployment Claims (every Thursday)

The day’s second release will be last week’s unemployment figures that are expected to show that 224,000 new claims for benefits were filed, down from the previous week’s 229,000. Rising claims are a sign of weakness in the employment sector that should contribute to bonds gains and slightly lower mortgage rates. A lower number would be taken as bad news for rates.



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

There is also a 30-year Treasury bond auction happening tomorrow with results posted at 1:00 PM ET. Yesterday’s 10-year Treasury Note auction drew a strong demand from investors, helping to fuel afternoon gains in bonds. If this sale also goes well, we could see another afternoon improvement in rates tomorrow also. On the other hand, a weak auction may lead to an upward move in yields and mortgage pricing.

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... Lock 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.

Crown Mortgage

2019 Woodbrook Court Suite 5
Charlottesville, VA 22901