Welcome to the TMS current mortgage rates blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Click here to get today’s latest mortgage rates.
Where are mortgage rates going?
We’ve entered another slow week for mortgage rates. There’s no speaking engagements from Fed officials to look out for and there’s not much in the way of significant economic data. I know that there are riveting moments in the world of mortgage rates, but sometimes, it can feel like constant banality.
Mortgage rates rose last Friday due to an unexpectedly robust July jobs report. The headline reading came in at 255k–a whopping 70k above the consensus for 185k. Of course, this totally caught everyone by surprise and caused financial market participants to put more money in equities. That pushed up the yield on long-term government bonds, along with mortgage rates. The yield on the U.S. 10-year treasury note had been floating around 1.50% to 1.55% most of last week and shot up to around 1.58%, which is where it stands right now.
Click here to get today’s latest mortgage rates.
There’s no denying that the headline reading of the jobs report has a strong impact on the markets, but it’s worth questioning if the headline reading is actually a reflection of a strong labor market. From Zero Hedge:
As MUFJ Securities strategist John Herrmann wrote in a note shortly after the report, the “jobs headline overstates” strength of payrolls. He adds that the unadjusted data show a “middling report” that’s “nowhere as strong as the headline.”
These seasonal adjustments that Herrmann refers to are clearly playing a huge role in the positive headline number. It’s not unusual for these adjustments to be wrong, and it’s quite possible that we will see a revision at a later date.
Another important factor to remember is that the jobs report does not differentiate between part-time and full-time jobs. That means that you really have to check under the hood to get an idea of the quality of jobs that are being created. In July, the industry that added the most jobs was professional and business services/temporary help services, followed by leisure and hospitality. The former are decent jobs but the latter are low paying part-time jobs. You can go through the complete run-down in the actual report.
Everyone wants the jobs market to be robust, and it seems that this often results in a lack of critical thinking around positive jobs data. I’m not saying it’s impossible for this reading to be an accurate depiction of the labor market, I’m just offering up a healthy dose of skepticism. If anything, it’s food for thought on a slow news day.
Click here to get today’s latest mortgage rates.
Fed Fund Futures
The Fed Fund futures saw a boost after the jobs report and they haven’t budged since. There’s all sorts of chatter about a September rate hike, but it’s only sitting with an unimpressive 18.0% chance. November has a 19.7% chance, and December is close to 50%.
What does this mean for me?
Mortgage rates have been moving up and down over the past month but really haven’t gone anywhere. They are still at very low levels that could make it a good time for you to refinance or purchase a home.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Productivity and Costs
Non-farm productivity fell 0.5% in the second quarter. That’s the third decline in a row, which is the longest streak the report has ever posted.
Treasury auctions
There will be a 4-week bill auction at 11:30 AM and a 3-year note auction at 1:00 PM.
Notable events this week:
Monday:
- Labor Market Conditions Index
- Treasury auctions
Tuesday:
- Productivity and Costs
- Treasury auctions
Wednesday:
- Job Openings and Labor Turnover Survey
- EIA Petroleum Status Report
- Treasury auctions
Thursday:
- Weekly Initial Jobless Claims
- Import and Export Prices
Friday:
- Retail Sales
- Producer Price Index – Final Demand
- Consumer Sentiment
from Total Mortgage Underwritings Blog http://ift.tt/2aJaMr6
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