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Bart Castelli

Mortgage Rates Moved Higher in Front of Jobs Report

Thursday, March 6, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 - Message

Mortgage rates moved higher today as we saw more positive economic news today. The most prevalently quoted conforming 30yr Fixed rate for the best-qualified borrower is now more so towards the 4.5% level than yesterday.

Nothing more significant than tomorrow's employment report - always the most important data of the month but this time even more so. The bellwether 10yr note continues to coil within a tight range and currently at 2.74%. Any recent decline in the rate has been short-lived and due mainly to some kind of market shock that was not expected - Monday's rally over the Ukraine issue and the Jan employment report a month ago. In each instance the improvement in rates ran out of steam in a day or two. Most trading in the last month on the 10yr and mortgages has been in a narrow range.

Softer than expected economic reports supported the bond market briefly on rallies, but there has been no follow-through on improvements, mainly on the unknown weather effect. The recent slowing in the economy is widely thought a result of the weather in most of the US in Dec, Jan and Feb; even Janet Yellen and most all Fed officials believe it, so too do investors propelling the stock market into new highs recently (S&P). The consensus 'guess' for the jobs report tomorrow is 154K non-farm jobs and 165K private jobs with the unemployment rate unchanged at 6.6%. Do not overlook revisions either - as revisions higher will add to the selling if we see them. The markets were completely convinced a month ago that Dec jobs would be revised higher than the 75K reported but there was essentially no revision.

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