Today's job report of only 39,000 jobs created in November is way off the estimated 140,000 jobs that the market expected. This bad news is typically good for mortgage rates and we would expect rates to improve on the news. Though rates are better than they were yesterday they are not making a move lower like I would expect.
The only explanation I can come up with is that interest rates are poised to go higher no matter what news is presented. It does look like the US economy is improving little by little based on most of the economic data. This jobs report has been the only miss as of late. So I take today's big miss with little impact on rates as a sign the markets are shrugging off the figure and that would mean rates may move higher from here.
There are a lot of moving parts when it comes to interest rates, but this job report typically sets the tone for the next few weeks. I would recommend borrowers in contract to buy or refinance that haven't locked their rate be in contact with their loan originator and be ready to lock. There is a chance rates could improve slightly from here, but there is a lot of technical support to break through and I don't think that will happen...so I am recommending to my clients that they be ready to lock at the first sign of a reversal today or early next week.
Have a great weekend. Please let me know if you have any subjects you would like me to discuss in future blogs. Cheers!
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