Wednesday, May 4, 2016 - Article by: James Brooks - Polaris Home Funding Corp -
By James Brooks
The bond market is unchanged from yesterday's close (1.78%), which should keep today's mortgage rates the as at yesterday's rates.
The first of today's three economic releases was ADP's April Employment report at 8:15 AM ET. It showed that 156,000 new private sector jobs were added last month, falling well short of the 196,000 that was expected. It was also a sizable decline from March's 194,000 payrolls that was revised lower from the previous estimate of 200,000. The lower number of payrolls makes the data favorable for bonds and mortgage rates.
At 8:30 AM ET, 1st Quarter Productivity and Costs data was posted, giving us measurement of employee productivity in the workplace. It revealed a 1.0% decline in worker output, but because analysts were calling for a larger decline and stronger levels of productivity is good news in this data, we can consider the news favorable also. However, this report is considered to be of low importance unless it shows a significant variance from forecasts.
February's Factory Orders closed out today's releases, coming at 10:00 AM ET. The Commerce Department announced a 1.1% jump in new orders for durable and non-durable goods. Forecasts predicted a 0.5% increase, meaning new orders were stronger than thought. That is a sign of manufacturing sector strength, causing us to label this report as negative for mortgage rates.
Tomorrow's only relevant data will be last week's unemployment figures at 8:30 AM ET. They are expected to show that 259,000 new claims for benefits were filed, up slightly from 257,000 of the previous week. Ideally, we want to see a large increase in initial claims, indicating employment sector weakness. The higher the number of claims, the better the news it is for mortgage rates. It is worth noting though that this is only a weekly snapshot, so I am not expecting it to have much of an impact on tomorrow's mortgage pricing.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.
Didn't find the answer you wanted? Ask one of your own.