Friday’s job report showed an unexpected drop in the number of jobs lost (247,000). The national unemployment number actually declined (9.4%) from the prior month’s reading (9.5%). The stock market reacted positively, and is currently up around 150pts……however, the bond market is reacting poorly to the news as more money continues its trend in moving out of the safe haven of bonds into the higher return potential of stocks. This is bad news for mortgage rates which amplified their weekly trend UP this morning. As continued signs of economic recovery present themselves, we could see a continuation to the recent sharp rise in mortgage rates into next week. At this point, all signs point in this direction as additional announcements of treasury auctions will also add to the supply in the bond market (mortgages are pooled and sold in the bond market as Mortgage Backed Securities).
All market analysts are advising to encourage those shopping for home loans to LOCK before things get worse…..rates are ending the week up about .5% from Monday’s levels….another .5% next week could discourage our customers…..note: Alert to LOCK.
FYI – Did you know that at BofA we have one free float down option for our customers during a lock period should we see rates improve. It is our commitment to hedge against the high side, while taking care of the customer during the lock period to take advantage of any improvement potential.
In an e-mail by :
Retail Sales Manager
Bank of America Home Loans