Mortgage Rates Sideways Despite ADP Robust Numbers

Mortgage rates are moving sideways so far today.  After we go the ADP report this morning, there was some negative movement in regards to pricing as another huge increase against forecasts, +263K (170K expected). ADP did revise the February numbers lower by 53K, but overall, higher than what was anticipated. Friday of course is the BLS March employment data. ADP data base been a little better than BLS numbers the last two months.  Prior to this data, the forecasts for non-farm private jobs from BLS on Friday were an increase of 170K, now that will be revised higher in market thinking.

A counter support for bonds this morning as North Korea fired another missile into the Sea of Japan belligerently defiant to the Trump meeting later this week with China’s leader Xi Jinping. Trump administration hopes to pressure China to take a stronger stand against N. Korea’s nuclear ambitions using China’s economic influence to force N. Korea to back down or as Trump has said previously he would deal with them directly, suggesting some form of military option.

Earlier this morning MBA reported that Weekly Mortgage Applications dropped again. This time by -1.6%. But once again, purchase applications Increased (1.0%). The decrease in applications was caused by a large -4.0% drop in refinance applications. March ISM services sector index was believed to be at 57.0 from 57.6 - the index dropped to 55.2 but still is holding in the mid-50s. Today, we get to see the Minutes from the last FOMC meeting where they raised rates and had one dissenting vote.

While mortgage rates are sideways this morning, I do not believe that it will get too much better throughout the day.  The very solid jobs and manufacturing numbers should keep mortgage rates from improving throughout the day.  I will leave it on what I said last night, these rates are on the back side of the pendulum that we have been seeing for the past few months.  If you are within 30 days of closing, I would lock as I do not see anything better unless the numbers today are missed drastically by the report on Friday.