May 7th, 2011 11:23 AM by Scott Bray
Rate Lock Advisory - Friday May. 6th 2011
The Labor Department gave us this morning’s key economic data with the release of the almighty monthly Employment report. It revealed that the U.S. unemployment rate rose to 9.0% last month, exceeding forecasts of remaining at 8.8%. That is good news for the bond market, but a larger than expected increase in the number of jobs added during the month offset that portion of the report. The data showed that 244,000 new jobs were added to the economy last month when analysts were expecting to see only 185,000, which is negative news for long-term securities such as mortgage-related bonds.It appears that traders were actually expecting to see weaker readings than forecasts were showing. The data itself gives us a mixed measure of employment sector strength, but the fact that weaker number were already built into the markets makes today’s results a disappointment to the bond market. Stock traders are using them as a rallying point, indicating that concerns about the economy may be overblown. Time will tell, but as I suspected, today’s data has hurt mortgage rates much more than it helped them.Next week is also a fairly active one in terms of economic releases. There are a handful of reports scheduled for release that are relevant to mortgage rates in addition to a couple of Treasury auctions.
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.