The Home Loan Mortgage Blog

Weekly Update - 10/5/18

October 5th, 2018 12:58 PM by T. Fanning



Hi, I hope you're doing well!

It was not a pretty week, as rates were up across the board. Next week brings us the release of a couple of inflation indexes along with two relevant Treasury auctions. Most of the week's activities take place mid-week with the bond market being closed Monday for the Columbus Day holiday.*

We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: FHA and VA 1x Close Construction-Perm; 1% Down Conventional Program; 1.50% Down FHA Advantage Program; CHFA Financing; Down Payment Protection program; HomeStyle renovation program; and a jumbo, 5% down program. We also can do hobby farms, Ag properties and Alt-A (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website:  www.hlmcolorado.com/mortgageprograms

As always, please let me know if I can help you/friends/family/potential buyers/borrowers!
                   

Last Updated: 10/5/18

Friday's bond market has opened in negative territory again, extending this week's significant sell-off. Stocks are down a little with the Dow showing a 7 points loss and the Nasdaq down 29 points. The bond market is currently down 6/32 (3.20%), which should push this morning's mortgage rates higher by approximately .125 of a discount point over Thursday's early pricing.

September's Employment report was released at 8:30 AM ET this morning, giving us a mixed bag of employment readings. The headline numbers were a 3.7% unemployment report, 134,000 new payrolls and a 0.3% rise in average earnings. The unemployment rate was lower than the 3.8% that was forecasted and down from August's 3.9%. September's rate is the lowest monthly rate since 1969. While the payroll number is well below forecasts of 185,000 new jobs, market analysts are blaming it on Hurricane Florence and other factors rather than a true weakening in the employment sector. Helping to offset the lower headline payroll number was news that August's payrolls were revised higher by 69,000 jobs and July's went up 18,000. Those upward revisions help fuel the theory that September's low number was just a fluke and was skewed by the storm.

Going into the release, few people felt the unemployment rate would draw much attention. The earnings reading was expected to be the primary focus of the report since it is related to inflation that bonds are very sensitive about. While the 0.3% rise matched expectations, it is still a fairly strong rate of growth. A bit of good news came in August's downward revision (+0.4% to 0.3%), but the adjustment was not enough to lower than annual rate of growth in earnings.

Overall, what was expected to be this morning's focus actually had little impact on today's reaction and the numbers that were not expected to be of much importance ended up being very relevant. The bond market was in negative ground before the report was posted and the release certainly did not help. Bonds initially reacted quite strongly to the data, pushing the 10-year yield to 3.23%, but have since recovered some of those losses. It will be interesting to see where the 10-year yield closes the day. There is likely to be strong resistance at the 3.23 – 3.25 levels, indicating that bond yields may pause or pullback a little before going much higher. Since mortgage rates tend to track bond yields, this could mean a much needed rest from the spike in rates.

Next week brings us the release of a couple of inflation indexes along with two relevant Treasury auctions. Most of the week's activities take place mid-week with the bond market being closed Monday for the Columbus Day holiday. Look for details on all of next week's events 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.*

*http://www.hlmcolorado.com/DailyRateAdvisory




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Regulated by the Colorado Division of Real Estate
www.nmlsconsumeraccess.org
Posted in:General
Posted by T. Fanning on October 5th, 2018 12:58 PM

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