Mortgage Rates Unchanged - Jobs Report is Next

Mortgage rates remained largely unchanged today, even with some volatility that was running throughout the day in Washington and abroad.  Even with that, the tight range kept everything within its range that has persisted for some time, and more such this week.

Tomorrow is the all-important March Jobs Report.  The headlines usually focus all attention on two parts of it, job growth and the unemployment rate. The more important ingredients are the labor participation rate, average hourly earnings and the U-6 the number of people working part time and those working at jobs that are under their skill levels. The report will likely confirm strong job growth, confirming the growth numbers we got yesterday from ADP.

Looking to the broader picture, consumer confidence is at multi-year highs, consumer sentiment also strong. Difficult to make a case now that tomorrow will be another strong job increase. Manufacturing and construction jobs are increasing, wages are increasing. History replete with evidence that increasing jobs and income is anathema for interest rates moving lower. Markets ripe with optimism about the Trump initiatives although recently learning that those tax cuts, fiscal pending, trade deals will not be easy or quick. The Fed and now the ECB poised to begin reducing support.  The Fed says two more rate hikes, the markets believe that, the Fed now testing markets’ reaction of beginning to reduce its balance sheet, floating the trial balloons. The ECB seeing better economic news from the EU.

This morning’s comments outlined what I believe is supporting these low rates that many still are scratching heads over. While economic reports and job growth do play a central figure on where rates are headed - it is the geo-political events that are keeping interest rates from increasing as haven moves are increasing. Something is brewing in Syria that Trump will not let go. The question then becomes, what will Russia do?

The Senate voted 52-48 along party lines to end filibusters for Supreme Court nominees after failing to end the debate on confirmation of Neil Gorsuch. This paves the way for Gorsuch to be confirmed Friday. Now no nomination to key posts can be stopped or delayed by a filibuster. America is not well served by ending filibusters and will further widen political difference of each party.

In summary, rates continue to hover near the bottom of the range of pricing we have had for several months.  The continued failure to break below this range makes me want to be much more cautious.  We have a Jobs Report tomorrow which all indications lead to another solid report putting pressure on rates again to move us back to the top of that range.  If you're closing soon I would protect what you have in front of you now.  I believe the risk of floating the rate right now is too high unless you can easily handle the pain of a wrong guess.