Mortgage Rate Advice

Rate Lock Advisory - Friday Apr. 3rd





Friday's bond market is in negative territory again despite news of a 25-year high unemployment rate. The stock markets are also showing losses with the Dow down 52 points and the Nasdaq down 5 points. The bond market is currently down 20/32, but we will still see an improvement of approximately .125 in this morning's mortgage rates as a result of strength late yesterday. However, I would not be surprised to see an upward revision to rates later today if the bond market remain near current levels or fall further.

The Labor Department announced this morning that the U.S. unemployment rate rose to 8.5% last month, its highest level since November 1983. The payroll reading of today's report showed similar results with 663,000 jobs lost during the month. That figure put us above 2 million jobs lost so far this year. To put that figure in perspective, if the year ended last week, this would have been the fourth worst year on record in job losses. Unfortunately, we still have three quarters of the year to go.

The bad news for bonds is that this morning's figures nearly matched forecasts. The lack of weaker than expected figures has made bonds less appealing this morning. At least we did not get stronger than expected numbers or we may have seen a sizable bond sell-off. Still, I think there is a pretty good possibility of getting an upward revision to rates sometime today unless bonds can rebound.

Next week is very light in terms of economic data, therefore, there is little news to drive bond prices higher or mortgage rates lower. If the stock markets retreat, bonds may come into favor with traders, but without something to fuel bond buying I don't think we can see much of an improvement in mortgage rates. Look for 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... Lock 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.


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* Please note that if you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a rate renegotiation policy. Contact me for details.