Mortgage Rate Update March 5, 2015

Mortgage note rates are essentially unchanged from Monday but the accompany closing costs are modestly worse.

Tomorrow we get the all-important jobs report for the month of February.  The markets are currently expecting 230,000 new jobs created and an unemployment rate of 5.6%.  A number north of 230,000 would likely pressure mortgage rates higher and vice versa.

This morning’s jobless claims number may offer a clue as to what will transpire tomorrow.  The release showed that 320,000 new cases of unemployment benefits were requested last week.  This was higher than expected and the highest level in almost a year.

I have written about the possible ill effects of lower oil prices a couple times on this blog.  Here in Portland, OR where I reside lower gas prices are an effective tax cut which should help stimulate the local economy.  However, for states such as Texas, Louisiana, Oklahoma, and North Dakota, who have been the economic engines of our economic recovery, lower prices mean fewer oil production projects are financially feasible.  The question is at what point do we start seeing fewer jobs created in those regions and what is the multiplier effect?

I switched to a locking bias on Monday which proved to be a good call.  For newer applications I am going to recommend floating into tomorrow’s jobs report with the expectation that results may be worse than expected.  This is always a big risk so if you don’t have the stomach for volatility go ahead and lock.

Current Outlook: floating