• This week has five monthly or quarterly economic reports that we will be watching in addition to a couple of Treasury auctions and some Fed speeches. Of course, there will also be headlines from the Middle East that will affect the markets, including some very interesting news this weekend.

 • The financial and mortgage markets will be closed tomorrow for the Memorial Day holiday and will reopen Tuesday morning for regular trading hours. Since the markets are closed and no data is being released, there will not be an update to this report tomorrow.

 • News this weekend that the U.S. and Iran have taken a big step towards a peace deal to end the war and reopen the Strait of Hormuz will likely cause a significant move in the markets Tuesday. Oil prices have already dropped, leading us to believe that the bond market should rally when it reopens Tuesday.

 • While mortgage rates should drop Tuesday morning, it is also important to remember that we have seen headlines toting progress in the past, but only to end up being inaccurate or overly optimistic. At this moment, we are treating the news as favorable for mortgage rates with an asterisk that warns this could change between now and Tuesday morning.

 • The Conference Board will start this week’s economic calendar with the release of their May Consumer Confidence Index (CCI) at 10:00 AM Tuesday. If confidence is sliding, analysts think consumer spending may slow in the near future. That would be good news for rates because consumer spending is such a big portion of the U.S. economy and bonds tend to thrive in weaker economic conditions. Tuesday's release is expected to come in at 92.0, down from April's 92.8. A larger decline in the index would be good news.

 • Wednesday doesn’t have any relevant economic data that we need to be concerned about, but does have a few other events that may have an impact on the markets and mortgage rates. They begin with the 1:00 PM ET results announcement of the day’s 5-year Treasury Note auction, followed by 7-year Notes being sold Thursday. Favorable news for rates would be a strong demand for the securities even though any reaction is likely to be minimal.

 • The other events set for Wednesday are Fed speakers that are talking about topics that are related to the economy and/or monetary policy. There is one set for 3:55 PM ET Wednesday afternoon and another at 8:00 PM ET. This means if the bond and mortgage markets have a reaction to what is said, it will be reflected in Thursday morning’s pricing.

 • Thursday is by far the busiest day of the week with five reports set for release if we include the weekly unemployment update.

 • The most important of Thursday’s group is April's Personal Income and Outlays data at 8:30 AM ET. The title readings give us an indication of consumer ability to spend and current spending habits. A rise in income means that consumers have more money available to spend. Current forecasts show a 0.4% increase in the income reading while spending rose 0.5%.

 • What makes Thursday’s first report so important are the Personal Consumption Expenditures (PCE) indexes in it that the Fed relies heavily on as a gauge of inflation. Weaker numbers would be considered good news for bonds and mortgage rates, but the overall and core PCE readings will draw much more attention than the income and spending numbers. The monthly and annual PCE readings should drive Thursday's bond trading and mortgage pricing.

 • The first revision to the 1st quarter Gross Domestic Product (GDP) reading is another early morning report Thursday. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. Last month's preliminary reading revealed that the economy grew at a slightly softer than expected annual rate of 2.0%. Analysts expect to see little change from that first reading. Since bonds are more appealing to investors when the economy is weaker, a large downward revision would be good news for mortgage rates.

 • April's Durable Goods Orders report is the third release of the morning, also at 8:30 AM ET. Durable goods are big-ticket products, such as airplanes, appliances, and electronics. It is expected to show an increase of 1.7% in new orders, indicating the manufacturing sector strengthened last month. By theory, the smaller the increase in orders, the better the news it is for rates.

 • Closing out this week’s economic calendar is the release of April's New Homes Sales figures at 10:00 AM ET Thursday. This is easily the least influential report of the week since it covers such a small portion of the housing sector. Analysts are expecting to see a decline in sales due to the noticeable increase in rates last month. Favorable news for rates would technically be a large drop in sales, but we are not expecting the report to have a strong impact on rates.

 • Overall, Thursday is the most important day of the week for rates due to the number and significance of the reports being released that day. However, we should also see a big move Tuesday morning after the markets have opened following the extended weekend and are able to digest the Iran news that has raised optimism the end of the war is nearing.

 • There is little doubt that we will see plenty of movement in the markets and mortgage pricing again this week. Therefore, it would be prudent to keep an eye on the markets if still floating an interest rate.

 • We would like to take this opportunity to wish you and yours a safe and wonderful Memorial Day holiday and to remember those who made the ultimate sacrifice for our country. 

 • 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... Float 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.