Friday January 9 2015 Mortgage Market Commentary Fridays bond market has opened in positive territory following mixed results in todays key economic data. The stock markets are reacting negatively to the news by posting sizable losses. The Dow is currently down 182 points while the Nasdaq has fallen 43 points. The bond market is currently up 18/32 (1.95%), which should improve this mornings mortgage rates by approximately .250 of a discount point from Thursdays morning pricing. Anyone currently paying over 4.250% for 30 year fixed should call or email me! 15 year down to 3.000% and 10 year down to 2.875% all with no point options. We can discuss closing cost and most of you know I can do no closing cost loans providing a few requirements. And don’t under estimate the POWER of the ARM programs…5y fixed/1y today 2.875% 7y fixed/1y 3.250% 10y fixed/1y 3.500% Great alternative should you be thinking on selling in 5-10 years. Thousands of dollars in savings. Let’s discuss the details…Not for everyone but it is for some! Todays big news came from the Labor Department, who gave us a lot of information that has left many people scratching their heads and unable to decide if it is good or bad news. In Decembers Employment report, they showed that the U.S. unemployment rate fell from 5.8% in November to 5.6% in December and that 252,000 new jobs were added to the economy. Analysts were expecting to see a 5.7% unemployment rate and 245,000 new payrolls. It is also worth noting that upward revisions to October and Novembers payroll numbers added a total of 50,000 jobs. That took Novembers surprise spike from the previously announced 321,000 to 353,000 jobs. These figures indicate employment sector gains that are technically good news for the economy and stocks but bad news for bonds and mortgage rates. The confusing part of the data came in the average hourly earnings readings that showed declining wages. Todays report showed that average earnings fell 0.2% last month when analysts were expecting to see a 0.2% increase. That is considered a significant variance. Also, the release showed a downward revision of 0.2% in Novembers previously announced 0.4% increase. This news causes concern that inflation is not going to reach the Feds target rate. The declining income also means workers have less money to spend, contributing to potentially slower economic growth. Therefore, we can consider this portion of the report favorable news for the bond and mortgage markets. Since the earnings data is a bigger surprise than the payroll and unemployment numbers, it appears it is having a heavier impact on todays trading. I would not be surprised to see stocks continue their selling into the weekend. If the major indexes fall further, we should see bonds maintain or extend their gains, possibly leading to an improvement in mortgage rates later today. Next week has several highly important economic releases in addition to a couple of Treasury auctions that may also affect mortgage rates. There is nothing of relevance set for Monday, so we can expect weekend news and stock movement to drive bond trading and mortgage rates as the week opens. Look for details on next weeks activities in Sunday evenings weekly preview. If I were considering financing/refinancing a home, I would.... Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Lock if my closing were taking place between 21 and 60 days... Lock if my closing were taking place over 60 days from now... This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Posted on: Fri, 09 Jan 2015 21:29:24 +0000
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