Our Real Estate Blog

Mortgage Rates (7/2/2010)

July 6th, 2010 10:06 AM by Lehel S.

Friday's bond market has opened down slightly following mixed results from today's important data. The stock markets initially opened flat but have since fallen well into negative ground with the Dow down 93 points and the Nasdaq down 17 points. The bond market is currently down 4/32, which should keep this morning's mortgage rates at yesterday's levels.

The Labor Department gave us today's more important data with the release of June's Employment report. It revealed a surprising 9.5% unemployment rate when it was expected to rise to 9.8%. The data showed that 125,000 jobs were lost during the month, which was close to forecasts of a decline of 100,000. It also said that average hourly earnings fell 0.1% when forecasts were calling for a slight increase.

The drop in the unemployment rate can be considered negative for bonds, but analysts feel this decline was more to unemployed workers giving up on finding a job than it was more people working. The number of payrolls lost is fairly neutral as it was close to forecasts and the declining wages reading is good news for bonds because it eases any inflation concerns that may exist. So overall, the data has failed to either impress or concern the bond and mortgage markets.

The Commerce Department released May's Factory Orders data late this morning, announcing a 1.4% decline in new orders at U.S. factories. This was much weaker than expected but doesn't carry the influence that some of the other monthly reports do. Therefore, its impact on this morning's rates has been minimal. 

Next week is very light in terms of relevant economic reports scheduled for release. There are no important Treasury auctions or other events scheduled that are likely to affect mortgage rates. The financial and mortgage markets will be closed Monday in observance of the Independence Day holiday and will reopen Tuesday morning. There is no early close for stocks or b onds today, but I suspect this afternoon's trading will be light as traders head home for the long weekend. Look for more details on next week's events in Sunday'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. 
Posted in:General
Posted by Lehel S. on July 6th, 2010 10:06 AM

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