Posts Tagged ‘ Non-Farm Payrolls ’

What’s Ahead For #Mortgage #Rates This Week : December 6, 2010

December 6, 2010
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Unemployment Rate 2007-2010Mortgage markets lost ground last week on growing optimism for the economy, a poor run for the dollar versus the euro, plus the lingering concerns that inflation will grip the U.S. long-term.

Conforming mortgage rates in Washington State rose for the fourth week in a row, stymying rate shoppers and raising the effective cost of homeownership for new buyers in need of a mortgage.

After a spectacular run that drew 30-year fixed rates to near 4.00, mortgage rates have returned to their highest levels since late-June.

Last week was heavy on news. Bond traders were hit with the Beige Book; with the ADP Challenger Report; with the ISM Manufacturing Report; and, with Pending Home Sales data for October. Each release moved markets.

Only Friday’s Non-Farm Payrolls report kept mortgage rates from really soaring.

According to the government, 39,000 net new jobs were created in November, and September’s and October’s data was revised higher by a combined 38,000.  The sum of these figures fell well short of Wall Street expectations — investors has expected 146,000 net new jobs in November.

As a result, mortgage rates made their largest, intra-day improvement of the year Friday morning, although they slid higher through the afternoon. Rates fell 1/8 percent Friday as compared to Thursday and rate shoppers may see that momentum carry forward into this week.

Fed Chairman Ben Bernanke gave a televised interview Sunday evening in which he said, among other things:

  1. “The fear of inflation is way overstated.”
  2. Additional bond market support is “certainly possible”.

Both comments should help to allay inflation concerns, and may lead mortgage rates lower this week. If you’re floating a mortgage rate, keep a watchful eye on markets and be especially wary if mortgage rates start to rise again. November was rough on mortgage bonds.

If December follows suit, expect mortgage rates to approach 5.50% percent.

For more information on home loans in Washington State call CU Mortgage Division at (360) 539-4687 or visit www.williamatuning.com .

Follow us on Twitter: http://twitter.com/cumortgage

What’s Ahead For Mortgage Rates This Week : October 4, 2010

October 4, 2010
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Jobs in focus this weekFor the third straight week, mortgage markets showed little conviction in the face of contrasting data. Mortgage bonds ended the week slightly better, but mortgage rates did not.

Conforming mortgage rates in Washington State were up-and-down all week before ending the week with a slight worsening. The inter-day volatility has come to characterize the current mortgage market.

In part, rates are jumpy because of data; it’s unclear when the economy is expanding or contraction — despite the “official call” of the recession’s end in June 2009.

Consider the conflicting reports from last week. Separate Consumer Confidence reports showed sentiment falling in September, but on the other hand:

In other words, the economy is in recovery, but the average Olympia citizen isn’t believing it. That causes purse-strings to stay tight, thereby retarding economic growth.

Wall Street is struggling with the contrast, and constantly changing its outlook.  It’s making mortgage rates tough to pin down and this week should reflect that. In addition to a home sales report and new consumer confidence data, the government prints its market-moving Non-Farm Payrolls report.

More commonly called “the jobs report”, Non-Farm Payrolls details the workforce, its size, and its Unemployment Rate.  There’s expected to be little change from August, a month considered “fair” by recent employment standards. If the jobs report shows improvement and/or strength, look for mortgage rates to rise. If the report does deterioration and/or weakness, look for mortgage rates to fall.

The Non-Farm Payrolls will be released Friday at 8:30 AM ET.

What’s Ahead For Mortgage Rates This Week : August 9, 2010

August 8, 2010
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Federal Reserve meets August 10 2010Mortgage markets improved again last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates in Washington State dropped on the news, making new, all-time lows.

Mortgage rates have been on an extended rally dating back to mid-April.

This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.

8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.

Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.

There’s other’s stories to watch this week, too. Each has the ability to change mortgage rates.

  • Tuesday : FOMC meeting; Consumer Confidence data
  • Thursday : Jobless Claims
  • Friday : Retail Sales; Consumer Price Index

It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.

Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.

If you haven’t spoken to a loan officer about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.

Mortgage Market News for the week ending July 9, 2010

July 9, 2010
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Rates Remain Low

With very little economic news during the short holiday week, mortgage rates remained at the lowest levels in decades. While mortgage rates ended the week slightly lower, the level of volatility in mortgage markets and other financial markets was relatively high. Even without major news, sudden movements in rates were common during the week. The stock market displayed similar price swings, as the Dow recovered the roughly 400 points it lost the prior week. This volatility in financial markets reflects the high level of investor uncertainty about the pace of global economic growth.

The current low mortgage rates can be attributed to a couple of factors. One is that inflation is under control and is expected to remain low for quite a while. Another is that demand for mortgage-backed securities (MBS) is high. When packaged and sold as government guaranteed MBS, mortgages are viewed as safe investments, much like US Treasury securities, and safety has been important to investors in these uncertain times. With financial regulatory reform behind them, Congress is now beginning to consider the appropriate role for the government in the housing market. Central issues include government guarantees for mortgages and the future of Fannie Mae and Freddie Mac. The debate is expected to be long and difficult, with no easy answers.

 

 
 

Also Notable:

  • Weekly Jobless Claims dropped to the lowest level in two months
  • As expected, the European Central Bank (ECB) made no change in rates
  • The Treasury will auction $69 billion in 3-yr, 10-yr, and 30-yr securities next week
  • The Fed’s Fisher suggested that the main economic challenge is building confidence
     
 

 

 
Average 30 yr fixed rate:
Last week: -0.05%  
This week: -0.02%  
Stocks (weekly):
Dow: 10,100 +400
NASDAQ: 2,175 +75

 

   Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, The Retail Sales report will be released on Wednesday. Retail Sales account for about 70% of economic activity. The detailed FOMC Minutes from the June 23 Fed meeting will also come out on Wednesday. Industrial Production, an important indicator of economic growth, is scheduled for Thursday. Empire State, Import Prices, Leading Indicators, the Trade Balance, Consumer Confidence, and Philly Fed will round out the week. There will be Treasury auctions on Monday, Tuesday, and Wednesday.

 

To learn more about news impacting interest rates and mortgage markets, go to www.mbsquoteline.com
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What’s Ahead For Mortgage Rates This Week : June 7, 2010

June 7, 2010
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Non-Farm Payrolls June 2008-May 2010Rate shoppers caught another break last week as mortgage markets improved on weak jobs data.

The May Non-Farm Payrolls report fell well short of expectations while ongoing jobless claims rose.  The two combined to cast doubt on the speed of the U.S. economic recovery, hurting stocks and helping bonds.

Conforming and FHA mortgage rates in Washington State dropped for the fifth time in six weeks and, once again, rates are trolling back near all-time lows.

No doubt you’ve heard that before — “mortgage rates at all-time lows”.  Mortgage rates have dipped to these levels four times in the last 19 months. However, on each occasion, it wasn’t long after touching bottom before rates reversed higher.

  • November 2008 : Roughly 90 minutes
  • March 2009 : Roughly 6 hours
  • May 2009 : Roughly 1 day
  • May 2010 : Roughly 3 hours

This week, rates could stay low for a matters of hours, or days — we can’t really know. Especially with no “major” data due for release.  Instead, most of this week’s economic news is incidental. That means that mortgage markets will move based on trader sentiment and “gut feel”.

The good news is that the market momentum is currently in the rate shoppers’ favor. We entered the weekend with rates falling and they look poised to open Monday no worse.

Here’s a look at what’s ahead this week:

  • Monday: Consumer credit, a critical piece of consumer spending
  • Wednesday : The Beige Book, a regional economic report from the Fed
  • Thursday : Initial and continuing jobless claims
  • Friday : Retail Sales and the Consumer Sentiment report

Market sentiment is a strange animal. One minute it can be your friend and, the next, it can be your enemy. Opinions change swiftly on Wall Street and so do mortgage rates. 

If you’re still not locked in, consider making your move. Rates have a lot farther to rise than they do to fall. You won’t want to be on the wrong side of the bet when rates start rising.

What’s Ahead For Mortgage Rates This Week : May 10, 2010

May 10, 2010
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Non-Farm Payrolls May 2008-April 2010Mortgage markets improved to their best levels of 2010 last week, aided by events half a world away and ongoing safe haven buying.  Greece’s debt problems continue to help mortgage rate shoppers in Olympia and around the country.

Conventional mortgage rates dropped last week, ARMs falling more than fixed. FHA mortgage rates also improved.

Global concern for the Greece Situation are so strong that markets even shrugged off April’s blowout job report. On most other days, mortgage rates would soar on better-than-expected jobs data — especially coming out of a recession.

The Department of Labor’s April Non-Farm Payrolls reports:

  • Payrolls have been net positive for 4 straight months
  • Nearly 600,000 jobs have been created thus far in 2010
  • Monthly job growth posted its biggest gain in 4 years in April

Additionally, more than 800,000 Americans re-entered the workforce in April in search of work.  As a result, the Unemployment Rate jumped by 0.2 percent — another positive sign (in a roundabout way).

But again, Wall Street wasn’t watching jobs — Wall Street was watching Greece. And Greece was in riot.

This week, without much new data due on the economy, mortgage markets should continue to take cues from Greece, the IMF and the Eurozone.  If a bailout agreement can be reached that investors feel is effective, the safe haven buying that’s led rates lower will recede and mortgage rates should rise.

Conversely, if an agreement is reached that investors deem ineffective, or no agreement is reached at all, mortgage rates should drop.

Each week for the last four weeks, we’ve talked about Greece and its pending bailout and how it might impact rates because each week the bailout appears imminent.  Even this week, the market opens with the news that the IMF has approved a $40 billion lifeline to Greece.  Maybe this will be the news that finally turns the mortgage market around.

Mortgage rates are unnaturally low right now and should change direction quickly. The problem is nobody knows when that will happen so be careful when rate shopping and keep an eye on the market.

Mortgage rates may fall further, but when they turn higher, they’re going to turn quickly.

What’s Ahead For Mortgage Rates This Week : April 5, 2010

April 5, 2010
By

Non-Farm Payrolls Apr 2008-Mar 2010Mortgage markets performed terribly last week as losses piled up day by day.  It marked the second straight week of sell-offs.

Pricing was influenced on several fronts including better-than-expected economic data, the end of the Federal Reserve’s mortgage buyback program, and a short trading week.

Mortgage rates rose to their highest levels since late-December last week.

The data from most anticipated story from last week – the jobs report — included a few good-for-the-economy surprises.

  1. Although payrolls fell 22,000 short of expectations in March, they were boosted by +62,000 in net revisions from January and February
  2. “Temporary Employment” — a leading jobs indicator — is up 313,000 in the last 6 months
  3. The average work-week and factory overtime both rose in March — a sign that hiring should increase soon

In general, what’s good for the economy is bad for mortgage rates and that’s one reason why rates spiked Friday. Employment is a keystone in the economic recovery and mortgage markets reacted accordingly.

This week is short on data but there’s a lot to move the markets.

For one, the Federal Reserve has called an emergency meeting to review its Discount Rate policy.  The meeting is called for today, Monday April 5, at 11:30 AM ET.  It’s unknown exactly what the meeting will cover, but if new monetary policy is made, expect that mortgage rates will be influenced.

Also worth watching this week are the technical trading patterns present in the mortgage-backed bond market.

Unlike fundamental trading in which markets move on data and projections, technical trading is how markets move based on patterns over time. The two methods co-exist on Wall Street but, occasionally, technical forces can be pronounced, leading markets to lurch up or down.  This week may be one of those times. 

Mortgage pricing is far below its 200-day moving average, resting slightly north of a key support level. If pricing worsens this week and bonds fall below the support level, mortgage rates could easily tack on quarter-percents or more per day until the market refinds its balance.

Overall, it’s a week you don’t want your rate to be floating. Sure, rates could improve, but there’s a lot more room for them to worsen.

What’s Ahead For Mortgage Rates This Week : March 29, 2010

March 29, 2010
By

Non-Farm Payrolls Mar 2008-Feb 2010Mortgage markets tanked last week, raising rates in Washington State to their highest levels in a month. 

Most of the losses occurred Wednesday in what was the worst 1-day mortgage market performance in more than 6 months. Even Friday’s rally could barely dent the losses. Most of the movement was tied to geopolitical concerns and worries of a ballooning federal debt load. 

The best time to lock a conventional or FHA mortgage rate last week was Tuesday morning.

This week, markets should remain volatile. There’s a large set of economic data due for release, plus trading volume will thin as the week goes on because markets are closed Friday for Good Friday.

Coincidentally, Friday is also the day that the March jobs report is released.

The non-farm payroll report is expected to show net job growth of 187,000 in March. This is a large number as compared to last month’s net loss of 36,000 job. However, analysts are already dismissing March’s numbers as skewed by both the bad storms of February, and the temporary hiring of Census workers.

In most months, major job growth would be bad for mortgage rates.  This month, that won’t be the case. It will take a figure north of 200,000 to cause rates to rise and the higher the actual number, the more that rates will respond.

Also this week, on Wednesday, the Federal Reserve’s $1.25 trillion program to support mortgage markets sunsets. Fed insiders estimate that the program dropped rates 1 percent since its inception in 2008. It’s reasonable that mortgage rates will rise after its end, therefore.

What’s Ahead For Mortgage Rates This Week : March 8, 2010

March 8, 2010
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Non-Farm Payrolls Mar 2008-Feb 2010Mortgage markets improved last week in low-volume trading.

Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.

Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon.

It was the second consecutive week in which mortgage rates fell.

Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do. 455 of the S&P 500 companies posted gains last week.

If you’re shopping for a home or a refinance, though, don’t rest on your laurels. After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.

This week, without much data to influence traders, the upward momentum in rates may have little cause to temper. We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday.  Beyond that, there’s not much else.

After last week’s performance, conforming mortgage rates in Washington State may be poised to rise rather sharply. If you’re waiting for the right time to lock your rate, it may have been this past Thursday. Consider locking your rate early this week to protect against further rate hikes.

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.