May 5th, 2023 12:25 PM by T. Fanning
Happy Cinco de Mayo!
Earlier this week, the Feds raised their benchmark rate another .25%. Mortgage interest rates responded by dropping. Today, employment numbers came in much higher than expected, pushing rates up. Overall, rates ended the week lower. Next week doesn't have a long list of items scheduled that we need to be concerned with, but a good part of what is on it can be highly influential. We will get important inflation readings at the producer and consumer levels of the economy, in addition to a couple of long-term Treasury security auctions. Monday has nothing scheduled that is expected to make headlines, meaning weekend news could be driving 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 (100% FHA financing); 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: 5/5/23
Friday's bond market has opened well in negative territory again following stronger than expected economic news. Stocks are rallying on the same data, pushing the Dow up 433 points and the Nasdaq up 159 points. The bond market is currently down 18/32 (3.44%), which should cause this morning's mortgage rates to be approximately .125 - .250 of a discount point higher than Thursday's early pricing. As bonds changed direction late morning and again during afternoon trading yesterday, some lenders issued one or more revisions to rates. The size of the increase this morning will depend on the intraday change(s) you saw yesterday.
Today's sole economic release was April's Employment report at 8:30 AM ET. It revealed that the U.S. employment rate dipped to 3.4% last month, the lowest since May 1969. Also surprising the markets was the 253,000 jobs added to the economy, up from March's downwardly revised 165,000. Analysts were expecting to see only 180,000 new payrolls. And following suit of the other headline numbers, average earnings rose 0.5%, exceeding forecasts of 0.3%. In other words, there is very little in this significantly influential report that the bond market likes. The data points towards a very strong employment sector that clearly makes it bad news for bonds and mortgage rates.
Next week doesn't have a long list of items scheduled that we need to be concerned with, but a good part of what is on it can be highly influential. We will get important inflation readings at the producer and consumer levels of the economy, in addition to a couple of long-term Treasury security auctions. Monday has nothing scheduled that is expected to make headlines, meaning weekend news could be driving bonds as the new week begins. 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
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