The Home Loan Mortgage Blog

Weekly Update - 6/2/17

June 2nd, 2017 3:18 PM by T. Fanning



TGIF!  

Rates had ANOTHER good week! Other than the 30-Year Fixed Jumbo loan, rates saw a decrease from last Friday's rates. Overall, today's report had much more favorable news than negative and we are seeing a good reaction in the bond market. Stocks are not reacting as much as bonds, although that may come later in the day. Next week has little scheduled that is expected to influence mortgage rates, leaving open the possibility of today's rally extending into early next week. There are only a couple monthly or quarterly reports and they are not considered to be highly important.*

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: 6/2/17

Friday's bond market has opened well in positive territory following the release of much weaker than expected employment data. The major stock indexes are up slightly with the Dow up 8 points and the Nasdaq up 15 points. The bond market is currently up 13/32 (2.16%), which should improve this morning's mortgage rates by approximately .250 of a discount point over Thursday's morning pricing.

Today's big news was May's Employment report at 8:30 AM ET. It showed that the U.S. unemployment rate slipped to 4.3% last month, its lowest level since May 2001. While the decline is technically bad news for bonds and mortgage rates, it does not draw as much attention as some may think because the biggest influence pushing the rate lower is a declining labor force participation rate. That means the unemployment rate moves lower because there are fewer people actively looking for work or currently employed and not due to more people finding jobs. So, while the headline number is often quoted, it doesn't carry the significance in the bond and other financial markets as it used to.

The good news came in the payroll numbers for May, April and March. Today's report showed that only 138,000 new jobs were added to the economy last month, falling well short of the 185,000 that was expected. It also was significantly lower than the ADP report's 253,000 private sector number that was released yesterday, underscoring the unreliability of it when trying to predict the governmental number. More good news came in downward revisions to April and March that lowered new jobs by 66,000. That dropped the three-month average job gain down to only 121,000 per month.

Lastly, the release also showed average earnings rose 0.2% last month when analysts were expecting to see a 0.3% rise. That is in addition to a 0.1% downward revision to April's earnings number, indicating that wages did not grow as much as expected over the past two months. This is good news because rising wages fuel inflation concerns that make bonds less appealing to investors.

Overall, today's report had much more favorable news than negative and we are seeing a good reaction in the bond market. Stocks are not reacting as much as bonds, although that may come later in the day. Next week has little scheduled that is expected to influence mortgage rates, leaving open the possibility of today's rally extending into early next week. There are only a couple monthly or quarterly reports and they are not considered to be highly important. 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
Posted in:General
Posted by T. Fanning on June 2nd, 2017 3:18 PM

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