Mortgage Rates Headed Down Despite Good Jobs Report

Mortgage rates headed down despite the good jobs report for the third month in a row.  After two days of volatility in the market and rates moving up, it seemed that the markets had had enough.  The most prevalently quoted conforming 30yr fixed rates for top tier borrowers continued to hover around 3.875% with 3.75% easily within reach.

More volatility again today as the DJIA sold of 229 points at its low but rallied back in the final hour of the day.  The 10yr note continued its decline after a day or two of increase, under 2.00% and in my view likely to head lower in the weeks ahead.  MBS prices where rate volatility is swinging prices in wide ranges each day. This morning’s employment report on headlines looked good but it was not - one thing, average hourly earnings, pushed the job gains and the decline in unemployment to the side. Average hourly earnings declined 0.2%, one more piece of evidence deflation is going to remain a key factor for the Fed when thinking about increasing interest rates. Prices and wages are declining, led by Europe and China and now the earnings here in the US. Yr/yr wages up 1.7% with overall inflation at 1.3% in the US and +0.4% in Europe. Leaving the question hanging, can central banks increase the level of inflation; the Fed has been working on it for four years with no success.

In summary, I was wrong again for the third month in a row as we saw rates rally nicely today, as European angst more than offset a positive January’s Jobs Report.  While we did not regain the best pricing of the year, we at least regain some of the losses from the week.  There is still no indication whether this move downward will continue short term, so anyone happy with their current rate might want to pull the trigger. 

Remember, if you want to know the benefits of locking your rate today versus floating, simply give me a call at 314-744-7806 or visit my website at www.CallTheMoneyMan.com. I have access to real time Wall Street data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.