September 1st, 2023 2:05 PM by T. Fanning
Happy 1st day of September!
Rates had a nice week, ending the week lower. Next week doesn't have any major economic releases scheduled. There are several moderately important reports that we will be watching, but none are likely to be market movers. The week starts with the markets closed Monday due to the Labor Day holiday.*
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: 9/1/23
Friday's bond market has opened in negative territory following mixed results from today's highly important economic data. Stocks are reacting to the data with early gains, likely contributing to this morning's bond pressure also. The Dow is up 195 points while the Nasdaq is up 13 points. The bond market is currently down 14/32 (4.16%), which should cause an increase in this morning's mortgage rates of approximately .250 of a discount point. If you saw a slight intraday improvement in pricing late yesterday, you will likely see a larger increase this morning.
August's Employment report gave us contradicting info about the labor market. Drawing plenty attention is the 0.3% jump in the unemployment rate, taking it to 3.8% when forecasts had it unchanged from July's 3.5% or possibly up 0.1% to 3.6%. This is the highest it has been since February of last year and is a sign of weakness in the employment sector. Also considered favorable for rates was the average hourly earnings reading that rose only 0.2%, falling short of the 0.3% that was expected. Weaker than expected wage growth is good news in terms of inflation and consumer spending.
The payroll number for August showed 187,000 new jobs were added to the economy. This was a little higher than the 170,000 that was expected, but downward revisions to July and June's numbers removed 110,000 jobs from previous estimates. That means the monthly increase from July to August was noticeably higher than analysts were expecting to see, taking it as a sign of recent strength in the sector. Therefore, we have to label this headline as bad news for rates.
Also posted this morning was August's manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. It stood at 47.6, higher than the 46.6 that was predicted and up from July's 46.4. The increase means surveyed manufacturers felt business improved last month, pointing toward manufacturing growth that makes bonds less appealing to investors. As a sign of stronger economic activity, this release is also bad news for bonds and mortgage rates. Bonds initially reacted to the employment report cautiously, but extended well into negative ground after this headline crossed the wires.
Next week doesn't have any major economic releases scheduled. There are several moderately important reports that we will be watching, but none are likely to be market movers. The week starts with the markets closed Monday due to the Labor Day holiday. Look for details on all of next 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... 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.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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