January 6th, 2023 12:11 PM by T. Fanning
I hope you had a great New Years! I wish you a good and safe 2023!
Rates finally caught a big break and ended the week lower. Next week has just a couple of relevant events that we will be watching. One is an extremely important consumer inflation reading that can heavily influence the markets and mortgage rates. The first event will come Wednesday afternoon when results of the 10-year Treasury Note auction are posted.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans; 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 also can do hobby farms, Ag properties and Non-QM (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 1/6/23
Friday's bond market has opened well in positive territory following mixed economic data to extend a positive move that started late yesterday. Stocks are showing strong gains of 325 points in the Dow and 79 points in the Nasdaq. The bond market is currently up 28/32 (3.61%), which should improve this morning's mortgage rates by approximately .500 of a discount point if compared to Thursday's early pricing. If you saw an intraday improvement yesterday, you should see a little smaller move this morning than those who did not get an intraday revision.
Today's major economic release was the monthly governmental Employment report at 8:30 AM ET that showed the U.S. unemployment rate unexpectedly fell 0.2% to 3.5% last month while 223,000 new jobs were added to the economy. Both readings are signs of a stronger employment sector, especially when analysts were predicting a 3.7% unemployment rate and only 200,000 new payrolls.
The good news came in the average earnings reading that showed a 0.3% increase, falling short of the 0.4% rise that was expected. The softer reading eases some inflation worries since rising wages gives consumers more money to spend and causes businesses to raise the cost of their products and services to offset them.
In short, today's release likely did little to influence the Fed's thought process towards monetary policy and their rate hikes to key short-term interest rates. It showed strength in the sector, but was not a blowout report that would allow the Fed to be more aggressive with their future rate hikes. It also was not a weak report that would raise concern the past moves to bring inflation down are causing possible recession. Absent a big surprise in upcoming inflation readings, the Fed is likely to stay their current course to bring inflation down.
Also posted this morning, but at 10:00 AM ET was November's Factory Orders data. The Commerce Department announced a 1.8% drop in new orders at U.S. factories, giving us another sign of manufacturing sector weakness. This data is a bit aged at this point and has had a minimal contribution to this morning's bond rally.
Next week has just a couple of relevant events that we will be watching. One is an extremely important consumer inflation reading that can heavily influence the markets and mortgage rates. The first event will come Wednesday afternoon when results of the 10-year Treasury Note auction are posted. 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... Float 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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