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Posts Tagged Non-Farm Payrolls

What’s Ahead For Mortgage Rates This Week : August 9, 2010

Aug 8

Posted by Real Estate Agent Referral Service - Thurston County Washington in Weekly Review | No Comments

Federal Reserve meets August 10 2010Mortgage markets improved again last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates in Washington State dropped on the news, making new, all-time lows.

Mortgage rates have been on an extended rally dating back to mid-April.

This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.

8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.

Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.

There’s other’s stories to watch this week, too. Each has the ability to change mortgage rates.

  • Tuesday : FOMC meeting; Consumer Confidence data
  • Thursday : Jobless Claims
  • Friday : Retail Sales; Consumer Price Index

It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.

Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.

If you haven’t spoken to a loan officer about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.

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What’s Ahead For Mortgage Rates This Week : May 10, 2010

May 10

Posted by Real Estate Agent Referral Service - Thurston County Washington in Daily Real Estate & Mortgage News, Weekly Review | No Comments

Non-Farm Payrolls May 2008-April 2010Mortgage markets improved to their best levels of 2010 last week, aided by events half a world away and ongoing safe haven buying.  Greece’s debt problems continue to help mortgage rate shoppers in Olympia and around the country.

Conventional mortgage rates dropped last week, ARMs falling more than fixed. FHA mortgage rates also improved.

Global concern for the Greece Situation are so strong that markets even shrugged off April’s blowout job report. On most other days, mortgage rates would soar on better-than-expected jobs data — especially coming out of a recession.

The Department of Labor’s April Non-Farm Payrolls reports:

  • Payrolls have been net positive for 4 straight months
  • Nearly 600,000 jobs have been created thus far in 2010
  • Monthly job growth posted its biggest gain in 4 years in April

Additionally, more than 800,000 Americans re-entered the workforce in April in search of work.  As a result, the Unemployment Rate jumped by 0.2 percent — another positive sign (in a roundabout way).

But again, Wall Street wasn’t watching jobs — Wall Street was watching Greece. And Greece was in riot.

This week, without much new data due on the economy, mortgage markets should continue to take cues from Greece, the IMF and the Eurozone.  If a bailout agreement can be reached that investors feel is effective, the safe haven buying that’s led rates lower will recede and mortgage rates should rise.

Conversely, if an agreement is reached that investors deem ineffective, or no agreement is reached at all, mortgage rates should drop.

Each week for the last four weeks, we’ve talked about Greece and its pending bailout and how it might impact rates because each week the bailout appears imminent.  Even this week, the market opens with the news that the IMF has approved a $40 billion lifeline to Greece.  Maybe this will be the news that finally turns the mortgage market around.

Mortgage rates are unnaturally low right now and should change direction quickly. The problem is nobody knows when that will happen so be careful when rate shopping and keep an eye on the market.

Mortgage rates may fall further, but when they turn higher, they’re going to turn quickly.

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What’s Ahead For Mortgage Rates This Week : April 5, 2010

Apr 5

Posted by Real Estate Agent Referral Service - Thurston County Washington in Interest Rates, Mortgage Rates | No Comments

Non-Farm Payrolls Apr 2008-Mar 2010Mortgage markets performed terribly last week as losses piled up day by day.  It marked the second straight week of sell-offs.

Pricing was influenced on several fronts including better-than-expected economic data, the end of the Federal Reserve’s mortgage buyback program, and a short trading week.

Mortgage rates rose to their highest levels since late-December last week.

The data from most anticipated story from last week – the jobs report — included a few good-for-the-economy surprises.

  1. Although payrolls fell 22,000 short of expectations in March, they were boosted by +62,000 in net revisions from January and February
  2. “Temporary Employment” — a leading jobs indicator — is up 313,000 in the last 6 months
  3. The average work-week and factory overtime both rose in March — a sign that hiring should increase soon

In general, what’s good for the economy is bad for mortgage rates and that’s one reason why rates spiked Friday. Employment is a keystone in the economic recovery and mortgage markets reacted accordingly.

This week is short on data but there’s a lot to move the markets.

For one, the Federal Reserve has called an emergency meeting to review its Discount Rate policy.  The meeting is called for today, Monday April 5, at 11:30 AM ET.  It’s unknown exactly what the meeting will cover, but if new monetary policy is made, expect that mortgage rates will be influenced.

Also worth watching this week are the technical trading patterns present in the mortgage-backed bond market.

Unlike fundamental trading in which markets move on data and projections, technical trading is how markets move based on patterns over time. The two methods co-exist on Wall Street but, occasionally, technical forces can be pronounced, leading markets to lurch up or down.  This week may be one of those times. 

Mortgage pricing is far below its 200-day moving average, resting slightly north of a key support level. If pricing worsens this week and bonds fall below the support level, mortgage rates could easily tack on quarter-percents or more per day until the market refinds its balance.

Overall, it’s a week you don’t want your rate to be floating. Sure, rates could improve, but there’s a lot more room for them to worsen.

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What’s Ahead For Mortgage Rates This Week : March 8, 2010

Mar 8

Posted by Real Estate Agent Referral Service - Thurston County Washington in Daily Real Estate & Mortgage News, Interest Rates, Mortgage Rates, Weekly Review | No Comments

Non-Farm Payrolls Mar 2008-Feb 2010Mortgage markets improved last week in low-volume trading.

Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.

Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon.

It was the second consecutive week in which mortgage rates fell.

Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do. 455 of the S&P 500 companies posted gains last week.

If you’re shopping for a home or a refinance, though, don’t rest on your laurels. After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.

This week, without much data to influence traders, the upward momentum in rates may have little cause to temper. We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday.  Beyond that, there’s not much else.

After last week’s performance, conforming mortgage rates in Washington State may be poised to rise rather sharply. If you’re waiting for the right time to lock your rate, it may have been this past Thursday. Consider locking your rate early this week to protect against further rate hikes.

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Tying Friday’s Jobs Report To Rising Mortgage Rates

Mar 4

Posted by Real Estate Agent Referral Service - Thurston County Washington in Daily Real Estate & Mortgage News, Interest Rates, Jobs, Statistics | No Comments

Unemployment Rate 2008-2010Conforming and FHA mortgage rates in Washington State have improved over the last 10 days, but that could all change this Friday with the release of February’s Non-Farm Payrolls report.

Non-Farm Payrolls is the official name of the government’s monthly jobs report and, given the fragile state of the U.S. economy, Wall Street will be watching it closely.

Mortgage rates could spike come Friday morning.

Jobs are an important part of the nation’s recovery. Among other concerns, unemployed Americans don’t spend as much money on goods and services, and are more likely to default on a mortgage. This retards economic growth and increases the potential for foreclosures.

When jobs numbers worsen, therefore, it follows that economic projections worsen, too.

Poor employment figures draw money away from the stock markets and into less-risky bond markets, including mortgage-backed bonds.  Mortgage rates improve as a result. Conversely, when jobs numbers improve, stock markets gain and bond markets worsen.

Analysts expect that a net 30,000 jobs were lost in February.

The Bureau of Labor Statistics press release hits at 8:30 A.M. ET, roughly an hour before Friday’s mortgage pricing will be available to consumers. If you’re worried about rates rising on the heels of a strong jobs report, therefore, be sure to get your rate lock in today instead. Once Friday gets here, it may be too late.

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The January 2010 Jobs Report May Lead Mortgage Rates And Home Prices Higher

Feb 4

Posted by Real Estate Agent Referral Service - Thurston County Washington in Daily Real Estate & Mortgage News, Interest Rates, Jobs | No Comments

Unemployment Rate 2007-2009On the first Friday of every month, the U.S. government releases its Non-Farm Payrolls data from the month prior. The data is more commonly known as “the jobs report” and it swings a big stick on Wall Street.

Especially now — many analysts believe job growth is tightly linked to the future of the U.S. economy.

Therefore, when January’s jobs report hits the wires at 8:45 AM ET tomorrow, Olympia home buyers would do well to pay attention. A net job reading that is much higher (or lower) than Wall Street’s expectations can make a serious change in home affordability.

Wall Street expects that the economy added 13,000 jobs last month.  It would mark the second time in 3 months that the jobs report showed a net monthly gain.

In November 2008, the economy added 4,000.

Jobs matter to the economy for a lot of reasons, but one of the biggest is that when Americans are working, Americans are buying and consumer spending accounts for 70 percent of the economy.

Job growth spurs the economy and draws money to the stock market. Unfortunately for rate shoppers, that kind of stock market growth happens at the expense of the bond market which is where mortgage rates are made.

Good jobs data usually means higher mortgage rates.

Also, job growth can lead to higher home prices. This is because working homeowners are less likely to default on a mortgage versus non-working homeowners.  In this way, job growth helps hold foreclosures to a minimum which, in turn, suppresses the housing supply.

Less supply means higher prices for home buyers.

Mortgage rates are idling this morning in advance of tomorrow’s data.  If you’re shopping for a mortgage rate, the prudent play may be to lock your rate before the jobs data is released.  A jobs figure that’s higher than the 13,000 expected could cause rate to rise sharply.

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What’s Ahead For Mortgage Rates This Week : February 1, 2010

Feb 1

Posted by Real Estate Agent Referral Service - Thurston County Washington in Daily Real Estate & Mortgage News, Interest Rates | No Comments

Non-Farm Payrolls Net New Jobs Jan 2008-Dec 2009In a news-heavy week, mortgage markets improved last week, adding to a 3-week rally.

But, given last week’s data and domestic story lines, it’s surprising that rates actually fell.

  1. The Federal Reserve said the economy continues to strengthen
  2. Consumer Confidence pushed to a 2-year high
  3. 4th Quarter domestic output exceeded Wall Street’s expectations

Usually, events like these draw money away from the bond markets and into the stock markets and Wall Street preps for better corporate earnings. The movement pressures mortgage rates to rise.

Last week, however, different stories trumped the headlines including a report from Standard & Poor’s that said U.K. banks are no longer counted among the world’s most stable.  This research, in particular, triggered a flight-to-quality among investors that pumped the U.S. dollar and sparked new demand for mortgage bonds.

It’s one reason why we ended the week on a rally and it just goes to show how unpredictable mortgage rates can be.

This week figures to be a challenge, too.

First, we start the week with key inflation data.  When inflation runs hot, it’s usually bad for mortgage rates.  Inflation is expected to be tame, however — a point the Fed made several times in its press release last week.  That said, inflation data is closely watched by markets and can make a big impact on rates.

Then, on Wednesday, ADP releases its private sector job report.  The ADP data is a precursor to the government’s own Non-Farm Payrolls report which is due to hit Friday.  ADP is expected to show a net loss of roughly 85,000 jobs.  Depending on where the actual numbers comes in, mortgage rates could wiggle a bit.

If the ADP report shows much fewer than 85,000 jobs lost, expect mortgage rates to rise.  The same is true for Friday’s job report.  A miss on expectations will cause mortgage to ratchet higher.

Since peaking on the last day of December, mortgage rates took a slow, steady descent through January. They’ve have taken back close to two-thirds of December’s overall losses.  This week, rates could fall some more, or they could bounce back up.  The most prudent time to lock would be prior to Tuesday’s closing. 

After that, the respective jobs reports will take over and rates could go either way with force.

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