The Home Loan Mortgage Blog

Hi, I hope you had a good week.

For the sixth time this year, the Fed unsurprisingly raised their benchmark rate. Mortgage rates reacted by giving back the decrease from last week, ending the week higher. Next week has only a couple of economic reports scheduled, but it does bring the highly important Consumer Price Index (CPI) that measures consumer inflation. There are also two Treasury auctions that have the potential to move rates during afternoon hours midweek. Monday has nothing of importance scheduled, meaning weekend headlines could be the driving force for bonds as the new week begins.*

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

Last Updated: 11/4/22

Friday's bond market has opened in positive territory following mixed employment news. Stocks are showing strength with the Dow up 418 points and the Nasdaq up 130 points. The bond market is currently up 5/32 (4.12%) after initially reacting negatively to this morning's early data. Afternoon gains yesterday, coupled with this morning's strength, should improve today's mortgage rates by approximately .375 - .500 of a discount point if compared to Thursday's morning pricing. If you saw an intraday improvement in rates yesterday, you should see a smaller move this morning.

Today's sole economic release was October's Employment report that showed the U.S. unemployment rate moved up 0.2% to 3.7% last month and that 261,000 new jobs were added to the economy despite the Fed's heavy rate hikes this year. The higher unemployment rate is good news for bonds and mortgage rates, but the payroll number exceeded forecasts of 215,000 in a sign of strength. Furthermore, a healthy upward revision of 52,000 jobs to September is another sign the employment sector is holding ground despite the Fed hoping for some weakness.

The third headline revealed a 0.4% increase in average earnings when forecasts were calling for a 0.3% rise. Higher wages give consumers more money to spend and usually causes companies to charge more for their products and services. Both contribute to rising inflation that make long-term securities, such as mortgage bonds, less appealing to investors and causes the Fed to be more aggressive with their rate hikes. This is what was behind the initial negative move during early morning trading. Fortunately, bonds have since rebounded into positive ground.

Next week has only a couple of economic reports scheduled, but it does bring the highly important Consumer Price Index (CPI) that measures consumer inflation. There are also two Treasury auctions that have the potential to move rates during afternoon hours midweek. Monday has nothing of importance scheduled, meaning weekend headlines could be the driving force for bonds as the new week begins. Look for details on next week's calendar 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.*

*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
                                                  

Company NMLS ID: 479289 | LO NMLS: 208694

CO License: 100008854

FL Company License: MBR4416 | FL License: LO89221

Regulated by the Colorado Division of Real Estate