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James Brooks

No Change In Today's Mortgage Rates 7-8-2016

Friday, July 8, 2016 - Article by: James Brooks - Polaris Home Funding Corp - Message

By James Brooks

The bond market is down 1/32 (1.38%), which should keep today's mortgage rates unchanged.

today's key economic data gave us surprising results, although you wouldn't know it by the bond market reaction. June's Employment report showed that 287,000 new jobs were added to the economy last month, greatly exceeding expectations of 175,000. A number like that usually has a significant impact on the markets and mortgage rates, but we have not seen that in bonds yet.

The report actually had some favorable pieces to it. The unemployment rate moved from May's 4.7% to 4.9% last month when analysts were calling for 4.8%. And average earnings rose only 0.1% compared to the 0.2% that was expected. Both of these figures are technically good news for bonds, but not good enough to offset the spike in payrolls. I believe we are seeing a muted response to the news partly because traders were expecting a rebound after May's dismal numbers and global issues such as Brexit and others that are favorable for bonds are still in the forefront.

I would not be surprised to see some intraday movement in bond prices and possibly mortgage rates as investors digest this report and its potential impact on the Fed's upcoming monetary policy decisions. We should also watch the major stock indexes as a noticeable move from them may carry into bonds before the end of the day. If stocks extend their current gains, we could see pressure build in bonds that may lead to an upward revision to rates. On the other hand, a retreat in stocks may be enough to fuel a slight improvement in rates later today.

Next week appears to be a pretty active week with a few pieces of important economic data, a couple of potentially influential Treasury auctions and a bunch public speaking engagements by current Fed members. There is nothing set for release Monday that we need to worry about with exception to a couple of Fed speeches.

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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.

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