Mortgage Rate Update December 5, 2013

Mortgage rates have worsened this week following stronger than expected economic data.

It started yesterday with the ADP jobs report which loosely tracks the government’s jobs report due out tomorrow.  Their version of the report showed 215,000 new jobs created last month.215jobs  In addition, ADP revised the previously released number for September higher by 50,000 jobs.  In addition, weekly jobless claims which are reported each Thursday for the previous week were also much stronger than expected.

Is the jobs market improving because the economy is growing faster than expected? The Commerce Department reported earlier today that the US economy grew at a 3.6% pace during the 3rd quarter of this year.  This is higher than expected and the fastest clip since the first quarter of 2012.

All in all the news is better than expected which is bad news for mortgage rates.

Heading into tomorrow’s all-important jobs report the markets are expecting 185,000 new jobs created for the month of November.  Yesterday’s stronger than expected ADP jobs report makes it less likely that tomorrow’s release will miss to the downside which is what we’d need to see for rates to improve.  If the jobs number is solid, which now appears likely, then speculation will begin to mount that the Fed will move to taper quantitative easing sooner rather than later and I could see mortgage rates increasing another .125% in the near term.

Current Outlook: locking

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.