January 8th, 2010 11:32 AM by Lehel S.
Friday's bond market has opened in positive territory following this morning's release of December's employment data. The stock markets are mixed with the Dow down 24 points and the Nasdaq up 6 points. The bond market is currently up 5/32, but we will likely see little change in this morning's mortgage rates due to volatility in bonds late yesterday.
Today's big news came from the Labor Department, who reported that the U.S. unemployment rate held at 10.0% and that 85,000 jobs were lost last month. The unemployment was expected to be unchanged, but the lost payrolls were worse than many had thought. The report also revealed a relative minor upward change in November's payrolls, revising from a loss of 11,000 to a gain of 4,000 jobs. But even with that revision, December's loss indicates that the employment sector was weaker than many had thought.
The third important reading of the report- average hourly earnings, matched forecasts with a 0.2 % increase. Overall, this report can be considered favorable for the bond market, especially since recent Fed comments have hinted at concern about the labor market. It is one of the factors why the Fed has been so hesitant to even consider raising short-term interest rates at recent meetings. This should bode well for bonds and lead to improvements in mortgage rates in the immediate future, unless we get contradictory economic data.
Next week is fairly active in terms of relevant economic reports and events, but the most important data comes the latter part of the week. There is nothing relevant scheduled to be posted Monday, so look for the stock markets and any weekend news to be the biggest influence on changes to mortgage rates. We will get important readings on consumer spending and inflation at the consumer level of the economy late in the week in addition to a couple of important Treasury auctions. Look for more details on next week's events in Sunda y's weekly preview.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.