• Wednesday’s mortgage rates should be lower than Tuesday’s early pricing by approximately .125 of a discount point. The bond market is currently up 6/32 (4.46%) as optimism continues about the Iran conflict ending and oil prices moving lower.

 • Stocks are mixed with the Dow up 329 points and the Nasdaq down 39 points.

 • There is no relevant economic data set for release today. We are seeing a bit of an extension of yesterday’s bond rally. This move was fueled by weekend headlines that indicated there was progress made on a peace deal with Iran.

 • We have a couple of non-data events taking place later today that have the potential to cause a minor change in rates. First will be the results of today’s 5-year Treasury Note auction that will be made available at 1:00 PM ET. Favorable news for rates would be a strong demand for the securities even though any reaction is likely to be minimal since these are shorter-term securities and rates are based on long-term debt.

 • The other events that we will be watching come late in the day. They are Fed speeches with topics related to the economy and/or monetary policy. There is one set for 3:55 PM ET this afternoon with Fed Governor Lisa Cook and another at 8:00 PM ET by Vice Chair Philip Jefferson.

 • Tomorrow is packed with data and other events that have the potential to influence mortgage rates. In addition to the 7-year Note auction and weekly unemployment figures, we will also get two important economic reports that can draw a strong reaction in the markets.

 • The most important of the 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%.

 • However, what makes this 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 income and spending numbers would be considered good news for bonds and mortgage rates, but the overall and core PCE readings will draw much more attention than those readings.

 • April’s overall PCE is expected to be up 0.5% while the core reading was up 0.3%. Both are predicted to rise on an annual basis. These PCE readings should drive tomorrow’s bond trading and mortgage pricing, not the income and spending numbers.

 • The first revision to the 1st quarter Gross Domestic Product (GDP) reading is another early morning report tomorrow. The GDP 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. 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 that are made with an expected life span of three or more years, such as airplanes, appliances, and electronics. It is expected to show an increase of 3.0% in new orders, indicating the manufacturing sector strengthened last month. 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 tomorrow. 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 of newly built homes due to the noticeable increase in rates last month. Favorable news for rates would technically be a large decline in sales, but we are not expecting the report to have an impact on rates.

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

CLICK HERE to view full detailed report and recommendations

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... 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.