• Thursday’s mortgage rates should be lower than Wednesday’s early pricing by approximately .250 - .375 of a discount point. If you saw an intraday improvement late yesterday, you should see a smaller improvement this morning. The bond market is currently up 4/32(4.37%).

 • Stocks are mixed with the Dow up 560 points and the Nasdaq down 157 points.

 • Yesterday’s 5-year Treasury Note auction was uneventful with the benchmarks pointing to an average demand from investors compared to other recent sales. The 1:00 PM ET results announcement failed to derail the day’s bond rally, but didn’t contribute to it either. This didn’t come as a surprise since these are shorter-term securities and mortgage rates are based on long-term debt, especially since the sale wasn’t overly strong or soft.

 • The most important of this morning’s batch of economic releases was May’s Personal Income and Outlays report that showed inflation rose last month and year-over-year, but at a pace that matched expectations. The overall May Personal Consumption Expenditures (PCE) index rose 0.4% while the more important core PCE that excludes volatile food and energy costs increases 0.3%. Their annual rate rose from 3.8% to 4.1% and 3.3% to 3.4% respectively.

 • The PCE readings show inflation is still moving away from the Fed’s preferred rate of 2.0% annually.

 • Other headline numbers in this report were not favorable. They showed income and spending rose 0.7% last month to exceed forecasts in both readings. Rapidly rising income means consumers have more money to spend and that was reflected in the stronger than thought spending number also. Both of these are signs of economic strength that make them bad news for bonds and mortgage rates.

 • This morning’s second release was May's Durable Goods Orders report that revealed a 4.5% decline in new orders at U.S. factories for big-ticket products such as airplanes, appliances and electronics. This data is known to be quite volatile from month to month, so the moderate variance from the 4.0% decline that was expected is not nearly as meaningful as it is in most other reports.

 • We also got data that showed the economy was stronger than previously thought during the first three months of the year. The second revision to the 1st Quarter Gross Domestic Product (GDP) reading came in at up 2.1%, upwardly revised from 1.6%. Typically, news of stronger economic activity is considered unfavorable for bonds and mortgage rates. However, with this data being aged now and the current quarter’s reading coming next month, today’s report has had no impact on today’s mortgage pricing.

 • And finally, the weekly unemployment update revealed only 215,000 new claims for jobless benefits were made last week, down from the previous week’s revised 227,000 initial filings. Analysts were expecting to see 224,000 initial claims. Declining claims are a sign of strength in the employment sector.

 • We have another auction taking place today with 7-year Notes being sold. Results of it will also be posted at 1:00 PM ET. We are not expecting a noticeable impact on rates from today’s auction either regardless if investor demand was strong or weak.

 • The University of Michigan will close out this week's economic calendar late tomorrow morning when they update their Index of Consumer Sentiment for June. Waning confidence in personal financial and employment situations usually translates into softer levels of consumer spending, restricting economic growth. A large downward revision would be considered good news for bonds and rates. Forecasts show the index coming in near the initial reading of 48.9 from earlier this month.

 • Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

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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.