October 7th, 2016 9:24 AM by T. Fanning
Last Updated: 10/7/16Friday's bond market has opened up slightly following the release of this morning's major economic news. The stock markets are showing minor losses with the Dow down 36 points and the Nasdaq down 12 points. The bond market is currently up 2/32 (1.73%), which may allow a slight improvement in this morning's mortgage rates. However, the improvement should be minimal if comparing to Thursday's morning pricing.Today's big news was September's monthly Employment report at 8:30 AM ET. The Labor Department announced that the U.S. unemployment rate rose 0.1% to 5.0% last month while 156,000 new payrolls were added during the month. Analysts were expecting a 4.9% unemployment rate and 176,000 new jobs. Both readings are favorable to bonds and mortgage rates as they indicate weaker conditions than many had thought.The average hourly earnings reading that has recently showed some concerning growth came in at up 0.2%. That matched forecasts and hasn't had much of an impact on this morning's bond trading or mortgage pricing. It still will be a focal point in the coming releases to watch for a pickup in wage growth that can fuel broader inflationary pressures.Overall, I don't believe today's report changes anything in regards to the Fed raising key short-term interest rates. As long as there is no significant change in economic activity between now and then, particularly in employment numbers, inflation and spending levels, December is the best bet for another Fed rate hike. There is a possibility of seeing it pushed back to the first meeting of 2017, but in my opinion December is the safest bet at this time.Next week is a holiday-shortened week with the bond market closed Monday for the Columbus Day holiday, although the stock markets will be open for trading. All markets are open for a full day of trading today. There are a couple of important economic reports set for release late next week. Before we get to those there will be two Treasury auctions and the minutes from the FOMC meeting that may influence mortgage rates. Look for details on the week's activities 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...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.
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