Slight Rise In Today's Mortgage Rates 5-4-2017
By James Brooks
The bond market is down 11/32 (2.35%), which should push today's mortgage rates higher by slightly more than .125 of a discount point.
Today?s economic data didn?t do much to help boost bonds. The first of today's three economic releases was 1st Quarter Productivity and Costs data at 8:30 AM ET. It showed a decline of 0.6% in worker productivity, falling short of the slight increase that was forecasted. Because stronger levels of employee productivity help allow low-inflationary economic growth, bond traders would have preferred to see a noticeable increase. Therefore, we should consider this data negative for bonds and mortgage rates.
Also at 8:30 AM was last week?s unemployment figures that revealed 238,000 new claims for unemployment benefits were filed. This was a decline from the previous week?s 257,000 initial filings and was lower than the 246,000 that was expected. Since falling initial claims is a sign of a strengthening employment sector, this is also unfavorable news for mortgage rates.
March?s Factory Orders was released at 10:00 AM ET. The Commerce Department announced a 0.2% rise in new orders at U.S. factories. This was softer than the 0.4% rise that was expected, indicating manufacturing activity was weaker than thought. That makes the data good news for the bond and mortgage markets. However, because a good portion of the data was released in last week?s Durable Goods Orders report, so this version is not considered highly important. That minimizes the impact it has on mortgage rates.
Tomorrow brings us the release of the almighty monthly Employment report. It will give us the U.S. unemployment rate and the number of jobs added or lost during the month along with other readings on the employment sector. This is an extremely important report to the financial and mortgage markets. It is expected to show that the unemployment rate inched up to 4.6% from March?s 4.5% and that approximately 185,000 payrolls were added to the economy during the month. Average hourly earnings are expected to rise 0.3%. A higher unemployment rate and a much smaller than expected payroll number and earnings reading would be good news for bonds and would likely push mortgage rates lower tomorrow morning because it would indicate weaker than thought conditions in the employment sector of the economy. However, stronger than expected results will probably fuel a stock rally and bond selling that leads to a sizable increase in 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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.