Posts Tagged ‘ Jobs Report ’

What’s Ahead For Mortgage Rates This Week : August 8, 2011

August 8, 2011
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FOMC meeting on TuesdayMortgage markets were especially volatile last week, taking rate shoppers in Washington State on a roller-coaster ride. The week’s news schedule was full. It included debt ceiling debates, jobs figures, and ongoing maneuverings within the Eurozone.

Each story a material impact on mortgage rates and, as a result, rates varied wildly from day-to-day.

Throughout the early part of the week, mortgage rates fell.

Monday, bond markets improved as leaks of the congressional debt ceiling agreement surfaced. Investors approved of the accord’s general terms and bought U.S.-backed debt to prove it. Tuesday, when the final agreement was reached and the terms were made public, mortgage rates dropped again.

This is because the debt ceiling agreement is based on spending cuts and tax increases. In response, analysts revised lower their respective growth estimates for the United States, benefitting bonds.

By Thursday, markets were in full rally mode.

On the eve of the July jobs report, traders flocked to the ultra-safe bond market; “whispers” put the net jobs created figure at a negative. Wall Street feared the worst. By Thursday’s close, mortgage pricing was at its best levels since November 2010.

Friday morning, though, markets recoiled. When the Non-Farm Payrolls report showed much-better-than-expected growth, it triggered a bond market sell-off and rates reversed higher. Rates rose more Friday than on any single day since November 30, 2010.

If you were quoted a mortgage rate on Thursday, on Friday, the same mortgage rate cost 1 discount point more.

This week, rates may rise or fall — it’s too soon to tell.

Friday afternoon, after markets closed, S&P downgraded the long-term debt of the U.S. government a notch. Typically, lower credit ratings means higher borrowing costs which leads to higher mortgage rates, among other things. However, it’s unclear how markets will react to the S&P decision.

Plus, the Federal Open Market Committee meets Tuesday and that, too, can affect markets.

As always, the prudent move is to lock your mortgage rate if its payment and terms are sensible. There’s too much volatility to know what markets might do tomorrow.

Job Growth Returning To “Normal” Levels — A Bad Sign For Mortgage Rates

May 5, 2011
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Job Growth (2000-2011)

Be prepared for Friday morning. Mortgage rates and home affordability could worsen quickly. At 8:30 AM ET, the Bureau of Labor Statistics releases its April Non-Farm Payrolls report and momentum has been strong.

The monthly jobs report is a market-mover and analysts expect that 196,000 new jobs were added last month. If those expectations are exceeded — by even a little — Wall Street would take it mean “economic strength” and the stock market would be boosted.

Too bad for rate shoppers, though; a move like that would also lead to higher mortgage rates throughout Washington State. This is because, coming out of a recession, reports of economic strength tend to push mortgage rates up. We’ve seen it happen multiple times in the last 8 months.

Since losing more than 7 million jobs between 2008 and 2009, employers have added 1.3 million jobs back to the economy. And we’re learning that there’s plans for fewer job cuts in the future. It’s clear that the jobs market is improving and this is why tomorrow’s Non-Farm Payrolls report is so important.

A “weak economy” helped keep mortgage rates low for a very long time. A strengthening economy will reverse that tide.

So, consider your personal risk tolerance today, in advance of tomorrow’s Non-Farm Payrolls report. If the thought of rising mortgage rates makes you nervous, call your loan officer and lock in a rate today. Once tomorrow’s data is released, after all, the market might look changed.

What’s Ahead For #Mortgage #Interest Rates This Week : May 2, 2011

May 2, 2011
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Fed Funds Rate 2008-2011Mortgage markets improved last week overall. Bigger concerns for Eurozone debt combined with lesser concerns for domestic inflation to push U.S. mortgage rates lower.

Last week marked the 3rd consecutive week through which conforming mortgage rates dropped, the longest such streak since February.

Mortgage rates in Tumwater are now scraping their lowest levels of the year.

A few interesting stories developed last week.

First, the Federal Open Market Committee met and voted to hold the Fed Funds Rate within its target range of 0.000-0.250. In its post-meeting press release, the FOMC said that inflation has been “pushed up” in recent months, but that believes, long-term, that inflation will moderate.

This message pleased the inflation-sensitive bond markets, the place where mortgage rates are made. Bond prices rose in response, and mortgage rates fell.

Then, because markets believe Greece can’t meet its current debt obligations without restructure, a bout of safe haven buying began, benefiting domestic mortgage-backed bonds and, therefore, mortgage rates.

It’s a terrific example of how world events can change mortgage rates for buyers and would-be refinancing households across Washington State.

This week, mortgage rates will take their cues from the Greece story as it continues to develop, and from Friday’s Non-Farm Payrolls report. The jobs report is always a potential market-mover.

Economists expect to see 196,000 jobs added in the economy for April. If the actual number is larger-than-expected, look for mortgage rates to rise on better prospects for the U.S. economy. If the number falls short, look for rates to drop.

With last month’s mortgage rate rally, this week marks a good time to lock a rate. Based on current market fundamentals, it appears that there’s much more room for rates to rise than to fall. This may be as low as rates get all year.

What’s Ahead For Mortgage Rates This Week : April 4, 2011

April 4, 2011
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Unemployment Rate 2008-2011In a volatile week of trading, mortgage markets closed unchanged last week. Despite economic data proving stronger-than-expected — a situation that tends to lead mortgage rates higher — concern for persistently high oil prices tempered Wall Street’s excitement and mortgage rates stayed steady.

That’s not to say rates weren’t volatile, however. From day-to-day, mortgage rates showed huge variance last week and several lenders issued five separate rate sheets Friday.

The 12-month average is slightly less than two per day.

Expect the volatility to continue into this week, too. With little economic data due for release, mortgage rates should move on momentum. This would be good news for rate shoppers and home buyers throughout Washington State because mortgage rates ended last week on a downswing.

It’s all because of the March jobs report.

The jobs report is important to the economy because as the number of working Americans grows, so does total earned wages nationwide. In theory, this leads to higher levels of consumer spending, and to larger government tax receipts.

It starts a cycle in which businesses and governments additional workers and the cycle continues.

The U.S. economy added jobs in March for the sixth straight month.

Mortgage rates are 0.69% higher today as compared to their early-November 2010 lows. The jump has added 14 percent to the 30-year, long-term cost of homeownership in Lacey. However, as compared to history, rates remain low.

If you’re currently shopping for a mortgage, talk to your loan officer about today’s market and its risks. Rates may not rise this week, but they’re poised to surge along with the economy. Consider locking in today.

What’s Ahead For Mortgage Rates This Week : September 7, 2010

September 7, 2010
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Mortgage rates changing quicklyLast week was a roller-coaster ride in the conforming mortgage market.  After opening the week by making new, all-time lows, markets reversed sharply on better-than-expected data in manufacturing and housing, and data from overseas.

Rates rose through Wednesday and Thursday, then Friday’s jobs report sent rates jumping.

Last week marked the first time that mortgage rates worsened 3 days in a row since late-April.

The combination of the jobs report not posting as poorly as predicted, and light volume because of Labor Day, pushed rates higher by as much as a quarter-percent in some markets.

On the week, conforming mortgage rates in Washington State were unchanged but, depending on when you locked, there was great disparity.  Tuesday’s rates were much better than Friday’s.

Meanwhile, this week, with little data due for release, mortgage rates should remain unpredictable, moving as a result of momentum and outside influence. It makes for dangerous times for rate shoppers.  Mortgage rates may fall, but, then again, they might rise, too.

Keep in mind that markets are in the midst of a 19-week rally and rates can’t fall forever. Mortgage bonds are likely overbought so when the selling begins, pricing should worsen quickly.  This will cause mortgage rates to spike.

Therefore, if you’ve been shopping for a mortgage or are just wondering if the time is right to refinance, call your loan officer and work the numbers together. Refinancing won’t make sense for everyone, but it may make sense for you.

Mortgage rates are still exceptionally low.

Tying Friday’s Jobs Report To Rising Mortgage Rates

March 4, 2010
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Unemployment Rate 2008-2010Conforming and FHA mortgage rates in Washington State have improved over the last 10 days, but that could all change this Friday with the release of February’s Non-Farm Payrolls report.

Non-Farm Payrolls is the official name of the government’s monthly jobs report and, given the fragile state of the U.S. economy, Wall Street will be watching it closely.

Mortgage rates could spike come Friday morning.

Jobs are an important part of the nation’s recovery. Among other concerns, unemployed Americans don’t spend as much money on goods and services, and are more likely to default on a mortgage. This retards economic growth and increases the potential for foreclosures.

When jobs numbers worsen, therefore, it follows that economic projections worsen, too.

Poor employment figures draw money away from the stock markets and into less-risky bond markets, including mortgage-backed bonds.  Mortgage rates improve as a result. Conversely, when jobs numbers improve, stock markets gain and bond markets worsen.

Analysts expect that a net 30,000 jobs were lost in February.

The Bureau of Labor Statistics press release hits at 8:30 A.M. ET, roughly an hour before Friday’s mortgage pricing will be available to consumers. If you’re worried about rates rising on the heels of a strong jobs report, therefore, be sure to get your rate lock in today instead. Once Friday gets here, it may be too late.