April 4th, 2025 2:49 PM by T. Fanning
Hello, I hope all is well and you’re staying busy!
In March, the U.S. added 228,000 jobs, surpassing expectations, with unemployment slightly up at 4.2%. Despite strong job growth, recent tariff announcements have heightened economic uncertainty, leading to a decline in mortgage rates.
Next week will be quieter for economic news compared to this week. However, we'll still get important updates on inflation, government bond sales, and the notes from the Federal Reserve's last meeting. Things will be slow until Wednesday, so any news about trade tariffs could significantly impact the markets before then.
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional 0% down; Conventional, 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 can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 4/4/25
Friday's bond market has opened up sharply again as the global markets are still responding to Wednesday afternoon's tariff announcements and now other country responses. Stocks are posting significant losses with the Dow down another 1,232 points after losing 1,679 points yesterday. The Nasdaq is in deja vu mode also, adding a loss of 645 points on top of yesterday's 1,050 point loss. The bond market is currently up 23/32 (3.93%) to break below the 4.00% level for the first time since early October of last year. This should leave this morning's mortgage rates approximately .250 of a discount point lower than Thursday's early pricing.
We did get some major economic data this morning when March's Employment report was released at 8:30 AM ET. It revealed the U.S. unemployment rate rose 0.1% to 4.2% while 228,000 new jobs were added to the economy. Forecasts had the unemployment rate holding at February's 4.1% and only 130,000 new payrolls. Average earnings pegged expectations of up 0.3%. These readings are mixed with the higher unemployment rates being good news for bonds and the payroll number being unfavorable. A noticeable downward revision to February's payroll number is helping to offset the surprise March number, but the truth is that the markets are trading almost exclusively on tariff news.
The markets were set to open as they closed Thursday (stocks down and bonds up) prior to this morning's announcement from China that they were imposing a 34% retaliatory tariff on all goods imported from the U.S. However, the losses in stocks got much bigger once the news hit the wires, leading to bonds extending their overnight gains. To further add to the volatility, a tweet from President Trump indicated he would not be changing his policies. This pretty much put an end to the theory that the president's tariff plan was just a negotiating tool and the tariffs would be reduced soon. Now fears are really kicking in that the tariffs are going to have a heavy negative impact on the U.S. economy, possibly putting it into a recession later this year.
We also have a public speaking appearance by Fed Chairman Powell to watch today. He is set to speak at a conference in Virginia at 11:25 AM ET. Whenever the Fed Chair speaks, the markets listen, but today's topic is labeled Economic Outlook. It will be hard for him to avoid the tariff issue and the market's response over the past two sessions, especially if he takes questions from the audience. The Fed's primary roles are to control inflation and maximize employment, not to control the financial markets. In other words, he has no responsibility to, nor is he likely to say anything today that will put an end to the stock sell-off and strong bond rally. Still, market participants will be listening in case he offers an opinion or prediction on the subject.
Next week brings us fewer economic reports than this week, but the calendar includes two highly important inflation indexes, a couple of long-term Treasury auctions and the minutes from the March 18-19 FOMC meeting. Activities don't begin until Wednesday, leaving retaliatory tariffs and related headlines to drive the markets until then. 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... Float 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
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