The Home Loan Mortgage Blog

Weekly Update - 2/4/22

February 4th, 2022 2:40 PM by T. Fanning

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Hi, I hope you’re having a good week.

 

Rates had an ugly week, ending on an up across the board. Next week does not have a high number of events scheduled that may affect mortgage rates, but there are a couple of things on the calendar that can cause noticeable movement in yields and mortgage pricing. The most important items are the Consumer Price Index (CPI) and 10-year Treasury Note auction set for midweek.*

 

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 Alt-A (stated income, verified assets for self-employed borrowers)! 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!


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Last Updated: 2/4/22

 

Friday's bond market has opened sharply lower again following significantly stronger than predicted employment numbers. Stocks are mixed with the Dow down 66 points and the Nasdaq up 91 points. The bond market is currently down 21/32 (1.91%), which should cause another increase of approximately .375 of a discount point in this morning's mortgage rates.

 

Today's major economic release was January's monthly Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate rose 0.1% to 4.0% during the month. And that concludes any possibly favorable news in the report. The other headline figures were awful for the bond market and mortgage rates.

 

First, there were 467,000 new jobs added to the economy during the month when only 160,000 were expected. Also, December and November's payrolls were revised much higher than previously announced, adding over 700,000 more jobs last year than thought. These numbers certainly paint a different picture of the employment sector than many analysts were thinking. They also underscore the Fed's comments about the country being close to full employment when justifying the need to raise key short-term interest rates in the near future.

 

Furthermore, the average hourly earnings reading jumped last month 0.7% when 0.5% was expected. The year over year rate also came in much higher than forecasts, fueling inflation concerns that have hurt the bond market and mortgage rates recently.

 

Overall, it is hard to imagine getting worse results from such a key report. It appears bond traders fell for the trap of relying on Wednesday's weak ADP private-sector employment report as a gauge for what we were going to get today (see my previous comments about ADP being overrated and unreliable in predicting the government's report). As a result, bonds are above important resistance levels again and mortgage rates are moving higher.

 

Next week does not have a high number of events scheduled that may affect mortgage rates, but there are a couple of things on the calendar that can cause noticeable movement in yields and mortgage pricing. The most important items are the Consumer Price Index (CPI) and 10-year Treasury Note auction set for 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...
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.
*

 

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

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
Posted by T. Fanning on February 4th, 2022 2:40 PM

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