• Thursday’s mortgage rates should be higher by approximately .125 of a discount point. The bond market is unchanged from yesterday’s close (4.46%).

 • Stocks are showing early losses, pushing the Dow lower by 173 points and the Nasdaq down 22 points.

 • None of yesterday’s afternoon and evening events had a noticeable impact on rates. The 5-year Treasury Note auction results indicated investor demand for the securities was in line with other recent sales. We can expect a similar interest in today’s 7-year Note auction.

 • Results of today’s sale will be posted at 1:00 PM ET, but it will take an overly strong demand to cause an improvement in rates this afternoon or an extremely weak sale to fuel an intraday increase.

 • The late Fed speeches yesterday also failed to move the markets.

 • We did get news from the Middle East that both Iran and the U.S. exchanged strikes while still saying the ceasefire remains in place. That news caused oil prices to jump, leading to overnight bond losses. Fortunately, this morning’s economic data was good enough per se to allow bonds to recover that weakness.

 • It is unlikely that the benchmark 10-year Treasury Note yield will remain at its current level throughout the rest of the day. We are expecting to see it move one direction or another before the end of the day based on all the news this morning and current trading activity.

 • The most important of today’s batch of economic data was April's Personal Income and Outlays report at 8:30 AM ET. The Personal Consumption Expenditure (PCE) indexes that the Fed relies heavily on when making monetary policy decisions showed an increase in April’s inflation, but at a bit slower pace than was expected.

 • Good news came in the overall April PCE that rose 0.4% when forecasts had it up 0.5%. Also, the more important core data that excludes volatile food and energy costs was up 0.2%, falling short of the 0.3% that was predicted.

 • Bad numbers were the annual readings that were at a 3.8% and 3.3% pace respectively. While the year-over-year numbers matched forecasts, they were stronger rates than March’s readings, meaning inflation is worsening on an annual basis.

 • The title readings of Personal Income and Outlays report gave us mixed results. They showed income was unchanged from March, which was well below the 0.4% that was expected. This is good news because slowing income growth means consumers have less money to spend, restricting economic activity. Unfortunately, despite the flat earnings, spending was up 0.5% for the month. This is likely a result of higher prices paid than strong consumption demand.

 • Also early this morning was the release of the revised Gross Domestic Product (GDP) reading for the 1st Quarter of the year. It showed the economy grew at a slower pace than previously thought with a downward revision that puts the growth rate at 1.6% instead of the initial estimate of 2.0%. A secondary reading that is related to inflation was also revised lower.

 • April's Durable Goods Orders report that was also released at 8:30 AM ET this morning gave us a sign of manufacturing sector strength. The 7.9% rise in new orders for products such as airplanes, appliances, and electronics was stronger than the 3.0% increase that was expected. Another reading in the report that excludes more costly and volatile airplane and transportation-related orders also rose more than expected.

 • Finally, the 10:00 AM ET release of April's New Homes Sales report revealed a 6.2% drop in sales of newly constructed homes. This was a larger decline than expected and signals weakness in the housing sector. We can label this data good news for rates since it is a sign of slower economic activity, but it is worth noting that this report covers such a small portion of all home sales in the U.S.

 • There is no relevant economic data set for tomorrow. We are expecting news about the Iran conflict, oil prices and possibly a Fed speech or two to drive tomorrow’s bond trading.

 • It is possible that we have a fairly quiet day for rates tomorrow, but that will depend on what non-economic headlines cross the wires.

 • 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... 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.