Premiere Mortgage Services Inc. - Dana Bain

Mortgage Rates Lowest Since September After Jobs Report

December 7th, 2018 5:14 PM by Robin Bain

  MBS prices rallied this afternoon as stocks got hit with hard selling. The DOW closed down 559 points. There is no data Monday. 

Mortgage bond prices failed to erase the losses from yesterday afternoon despite mixed data. Fed Chair Powell noted last night that the economy remains strong but didn't give details on any adjustments to Fed rate policy. The DOW was up 65 points at 10am et pricing. 

The headline figure of the employment report was right in line with expectations. Unemployment was 3.7%. Payrolls rose a lower than expected 155K. Analysts looked for a reading of +180K. Average hourly earnings rose 0.2% versus the expected 0.3% increase. 

Treasuries outperformed MBSs this week. 

Consumer sentiment data was 97.5 versus the expected 95 reading. 

Mortgage rates held on
 to their recent improvements today after the important Employment Situation (the big "jobs report") showed November job creation was lower than expected.  In general, weaker job creation is good for interest rates because it speaks to slower economic growth and inflation (both of which are enemies of rates).  This report was particularly important because a strong result would have cast doubt on several speeches from members of the Federal Reserve.  Those speeches have warned about slower economic growth in 2019 and the potential for fewer rate hikes than previously anticipated.  

There were no clear winners or losers at first--probably because job creation is still historically solid.  Additionally, the unemployment rate remained ultra low, and wage growth remained above 3.0% on an annual basis.  Markets were indecisive at first, but stocks and bond yields eventually began to move lower.  Multiple mortgage lenders offered small improvements on rate sheets in the afternoon, after the bond market gained enough ground.  Today's mortgage rates are the lowest in months and current trends are about as strong as they've been in more than a year.

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Posted by Robin Bain on December 7th, 2018 5:14 PM


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