January 5th, 2024 12:52 PM by T. Fanning
Hello, I hope you had a great first week of 2024!
Rates were up this week due to better-than-expected employment numbers. Next week starts off light with little scheduled the early part of the week, but the latter days have a couple of highly influential inflation readings. There are also two Treasury auctions set midweek that are known to affect rates during afternoon hours. We can expect weekend headlines to drive bond trading and mortgage rate movement Monday.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional, FHA and VA 1x Close Construction-Perm; 1.50% Down FHA Advantage Program; CHFA Financing; HomeStyle renovation program; and a Jumbo, 5% down program. We can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 1/5/24
Friday's bond market has opened in positive territory despite stronger than expected results in today's major economic release. Stocks are reacting favorably to the same data, pushing the Dow higher by 94 points and the Nasdaq up 68 points. The bond market is currently up 7/32 (3.97%), but weakness late yesterday should keep this morning's mortgage rates close to Thursday's early pricing.
December's Employment report that was released early this morning showed us the employment sector remained resilient as the year came to a close. The economy added 216,000 jobs last month while the unemployment rate held at 3.7%. Forecasts had the payroll number around 160,000 and unemployment at 3.8%. Furthermore, average hourly earnings rose 0.4% when they were expected to rise 0.3%. The stronger monthly earnings pushed year-over-year earnings higher than expected (up 4.1% vs 3.9%). In short, there is very little for the bond market to like in this report and it may affect the Fed's monetary policy decisions by delaying a cut to key short-term interest rates.
November's Factory Orders data was posted at 10:00 AM ET this morning, revealing a 2.6% jump in new orders at U.S. factories. This was well above the 2.0% increase that was predicted, hinting at manufacturing sector strength. However, this report doesn't carry a high level of importance because a good portion of the data was previously announced in the Durable Goods Orders report. This has prevented the data from negatively affecting mortgage rates.
This morning's final release was December's non-manufacturing index from the Institute for Supply Management (ISM). They announced a reading of 50.6, falling well short of November's 52.7 and the 52.5 that was expected. The decline means fewer surveyed manufacturing executives felt business improved last month than did in November. This is a sign of weakness in the manufacturing sector that makes the report good news for mortgage rates.
Next week starts off light with little scheduled the early part of the week, but the latter days have a couple of highly influential inflation readings. There are also two Treasury auctions set midweek that are known to affect rates during afternoon hours. We can expect weekend headlines to drive bond trading and mortgage rate movement Monday. Look for details on next week's calendar in Sunday evening's 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... Float 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.*
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