December 6th, 2024 5:14 PM by T. Fanning
I hope you had a great Thanksgiving and a fantastic week!
In October, job openings rose while hiring slowed, causing payroll growth to hit a four-year low, the Bureau of Labor Statistics reported. As the Federal Reserve monitors these trends, markets anticipate a quarter-point interest rate cut later this month to address potential labor market weaknesses. Over the past few weeks, rates have been on a downward trend.
Next week is light on events impacting mortgage rates, but keep an eye on key inflation readings and two Treasury auctions. While Monday is quiet, expect midweek to be more active
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
As always, please let me know if I can help you, your friends/family/potential buyers/borrowers!
Last Updated: 12/6/24
Friday's bond market has opened in negative territory despite data that can easily be labeled bad news for bonds. Stocks are also showing gains, pushing the Dow up 34 points and the Nasdaq up 162 points. The bond market is currently up 6/32 (4.16%), which with gains late yesterday should improve this morning's mortgage by approximately .250 of a discount point. If you saw a slight improvement late yesterday, you will likely see a smaller move this morning than those who didn't get a revision.
Today's big news was the release of November's Employment report that showed 227,000 new jobs were added to the economy and a 4.2% unemployment rate. Analysts were expecting to see 200,000 new payrolls, but feared a larger upward revision to October's number was possible. This morning's release did show a change from up 12,000 to up 36,000 for October, still well short of predictions before that month's data was released last month. The slightly higher than expected November number is offset by the favorable increase in the unemployment rate.
The first two headline numbers could justify a flat open in bonds since there were no major surprises in either. What makes it surprising that we didn't see a negative reaction in the bond market was the earnings data within the report. November's earnings rose 0.4%, exceeding forecasts of 0.3%. Furthermore, they rose 4.0% annually when traders were expected to see 3.9%. Stronger earnings are an inflation red flag because rising wages often fuels inflation throughout the broader economy, making long-term securities such as mortgage bonds less appealing to investors. Fortunately, bond traders have their own game plan this morning, leading to lower mortgage pricing.
This morning's second economic release also gave us results that should be considered bad news for rates. The University of Michigan announced their initial December Index of Consumer Sentiment stood at 74.0. The increase from November's 71.8 means surveyed consumers feel better about their own financial and employment situations than was thought. It was expected to rise from November, but only to 73.0. The larger increase is a sign that consumers are more likely to spend than last month, fueling economic growth.
Next week doesn't bring us a large number of events that are expected to influence mortgage rates, but does have a couple of highly important inflation readings in addition to two Treasury auctions that may come into play during afternoon trading. The week starts light with nothing of importance set for Monday. We should see the most movement in rates midweek. 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.
*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
www.nmlsconsumeraccess.org
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.