Mortgage Rate Update July 2, 2014

I am sending ‘rate update’ today because the all-important jobs report is due out in the morning and I want to give borrowers a chance to consider the option of locking prior to the release of the report (when its too late).

Although mortgage note rates are unchanged the accompanying closing costs are modestly worse.

According to payroll processing company ADP the US economy added 281,000 new jobs in June, the best reading this year.  This number was higher than expectations.  Tomorrow’s monthly jobs report from the Bureau of Labor Statistics carries much more weight in the interest rate markets and there is not perfect correlation between the two releases.

The markets currently expect tomorrow’s report to show ~215,000 jobs created.  Typically, a number north of this amount would cause rates to rise and vice versa.  The safe play is to lock in while mortgage rates remain .375% below where we started the year.  However, a strong jobs report may already be baked into the pricing on mortgage rates so floating may not be a bad plan.

Have a safe and fun 4th of July holiday!

Current Outlook: neutral