The Home Loan Mortgage Blog

Weekly Update - 6/1/18

June 1st, 2018 12:43 PM by T. Fanning



Hi,

Rates were mixed this week. ARM and Jumbo rates saw a minor increase; Conventional and Government rates saw a small decrease. Next week is noticeably lighter in terms of economic releases than this week was. Not only in the number of reports, but also the importance of the data that is being posted. Unlike most weeks, it will be posted during the earlier part than the latter and has something set for Monday. We will get April's moderately important Factory Orders report late Monday morning that tracks orders for both durable and non-durable goods.*

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: 6/1/18

Friday's bond market has opened in negative territory following stronger than expected economic news. The major stock indexes are reacting favorably to the data, pushing the Dow higher by 161 points and the Nasdaq up 54 points. The bond market is currently down 9/32 (2.89%), which should cause an increase in this morning's mortgage rates of approximately .250 of a discount point.

The first of today's two big reports was May's Employment data at 8:30 AM ET. It revealed that the unemployment rate slipped to 3.8% last month, its lowest point since April 2000 and lower than the 3.9% that was forecasted. While the decline is being attributed more to a drop in the labor participation rate (people actively working or looking for work), it still is a bad headline number for the bond and mortgage markets.

Another piece of bad news in the report was the 223,000 new jobs added to the economy during the month, exceeding expectations of 190,000 new payrolls. April's payroll number was revised a little lower than previously announced but March's was revised higher. The net difference added 15,000 jobs to earlier estimates and with May's number the average monthly payroll number over the past three months is now 179,000. That is not a significant number, however, it is believed to be strong enough for the economy to continue growing at a moderate pace.

The average hourly earnings reading that helps us track wage inflation and consumer ability to spend, rose 0.3% last month. Analysts' predictions were between 0.2% and 0.3%, so no big surprise in that headline number. If it would have been higher, we likely would have seen even a stronger negative reaction to the data this morning.

Also posted this morning was the Institute for Supply Management's (ISM) manufacturing index for May. It came in at 58.7, higher than April's 57.3 and stronger than the 58.0 that was expected. The increase means more surveyed manufacturing executives felt business improved during the month than did in April. That is a sign of manufacturing sector strength, making the data unfavorable for bonds and mortgage pricing.

Overall, today's economic data was bad news for mortgage rates. Bonds tend to thrive during weaker economic conditions while stocks usually move higher. Therefore, today's data that points towards stronger economic growth makes bonds less appealing to investors, driving yields and mortgage rates higher.

Next week is noticeably lighter in terms of economic releases than this week was. Not only in the number of reports, but also the importance of the data that is being posted. Unlike most weeks, it will be posted during the earlier part than the latter and has something set for Monday. We will get April's moderately important Factory Orders report late Monday morning that tracks orders for both durable and non-durable goods. 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.*

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




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Regulated by the Colorado Division of Real Estate
Posted in:General
Posted by T. Fanning on June 1st, 2018 12:43 PM

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