May 4th, 2018 12:41 PM by T. Fanning
Last Updated: 5/4/18Friday's bond market has opened in positive territory following favorable employment news. The major stock indexes are showing minor gains at the moment, pushing the Dow higher by 46 points and the Nasdaq up 26 points. The bond market is currently up 2/32 (2.94%), which should improve this morning's mortgage rates just slightly.Today's only economic news was a major release- April's Employment report. The Labor Department announced early this morning that the U.S. unemployment rate fell from 4.1% to 3.9% last month, its lowest level since December 2000. They also said that 164,000 new jobs were added to the economy during the month, falling short of the 190,000 that was forecasted. The third headline number we watch is the average hourly earnings that came in .15% higher than March's level. That equates to 0.1% or 0.2%, depending if you believe in rounding up or not. That is relevant because analysts were expecting to see a 0.2% increase. Rising wages are bad news for bonds and mortgage rates, so the lower the number, the more favorable the data is for mortgage pricing.Overall, the report is fairly good news for the bond and mortgage markets, but not great news. The lower unemployment rate is good, although it is being attributed to a weak labor participation rate (fewer people looking for jobs). The payroll number being lower than expected is also positive news. Unfortunately, upward revisions to previous months kind of offsets the weaker April number. And the earnings reading is favorable or neutral, depending if you use 0.1% or 0.2% as the number. The net impact on this morning rates is slightly positive. However, the move isn't strong enough to justify letting our guard down. It is possible to see bonds reverse course before the end of the day, especially if stocks rebound like they did yesterday.Next week has a couple of important economic reports scheduled for release in addition to two Treasury auctions that may influence mortgage rates. The most important data comes mid-week when two inflation readings are posted. There is nothing of relevance set for Monday or Tuesday. 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
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