The Home Loan Mortgage Blog

Weekly Update - 10/6/17

October 6th, 2017 10:52 PM by T. Fanning



Hi!

Rates ended up mixed this week. Next week brings us several reports that may influence mortgage rates in addition to a couple of Treasury auctions and the minutes from the most recent FOMC meeting. The bond market will be closed for the Columbus Day holiday while stocks will be trading. All of the week's events take place from mid-week on, so the most movement in rates is likely to come the latter days.*

We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: a Conventional, FHA and VA 1x Close Construction-Perm; 1% Down Conventional Program; CHFA Financing; 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: 10/6/17

Friday's bond market has opened well in negative territory following the release of a key economic report. Stocks are showing minor losses during early trading with the Dow down 11 points and the Nasdaq down 3 points. The bond market is currently down 12/32 (2.39%), which should push this morning's mortgage rates higher by approximately .250 of a discount point.

This morning's big news was September's Employment report at 8:30 AM ET. The release showed that the U.S. unemployment rate fell to 4.2% last month when analysts were expecting it to remain unchanged at 4.4%. The second headline number was the 33,000 DECLINE in payrolls, the first drop since September 2010. Forecasts were calling for approximately 90,000 jobs added to the economy. On top of that, August's and July's payroll numbers were revised to show a net loss of 38,000 jobs from previous estimates.

The lower unemployment rate is not good news for bonds and mortgage rates, but it doesn't usually have too much of an impact on trading these days. The payroll number draws the most attention and the decline would normally be significantly favorable news. Unfortunately, the numbers are being attributed to Hurricanes Harvey and Irma. Their impact on the labor force is skewing the payroll figures and nobody can determine just how badly. Therefore, we aren't seeing a favorable reaction in the bond and mortgage markets.

What the bond market is reacting to is the spike in average earnings. Today's released showed a 0.5% rise in earnings, exceeding predictions of a 0.2% rise. The higher wages mean consumers have more money to spend, fueling economic growth. It also is an inflationary sign that makes bonds less appealing to investors and allows the Fed to bump key short-term interest rates sooner than later.

Next week brings us several reports that may influence mortgage rates in addition to a couple of Treasury auctions and the minutes from the most recent FOMC meeting. The bond market will be closed for the Columbus Day holiday while stocks will be trading. All of the week's events take place from mid-week on, so the most movement in rates is likely to come the latter days. 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.*

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




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Posted in:General
Posted by T. Fanning on October 6th, 2017 10:52 PM

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