Mortgage Rate Update July 1, 2013

We switched to a near-term floating position last Thursday and since then mortgage rates have improved modestly.  This week will be interesting given that the 4th of July holiday is on Thursday and the all-important jobs report is scheduled for Friday.

Currently the market is expecting Friday’s jobs report to show 155,000 new jobs created during the month of June.  Based on the Fed’s recent signals we know that a number north of expectations could trigger the Fed to pull back on quantitative easing (QE) in the next couple months.  Conversely, if the report shows sluggish jobs growth it would likely cause the Fed to leave the current pace of QE in pace for a little longer which may help mortgage rates improve.

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FRIDAY’S JOBS REPORT MAY CAUSE A LOT OF VOLATILITY FOR INTEREST RATES.

We may see a large swing in interest rate pricing on Friday because there is expected fewer participants in the marketplace due to the 4th of July holiday falling on Thursday (BTW, rate update will not come out until Monday of next week).  Anytime there are fewer buyers and sellers in a marketplace it is a recipe for volatility.

Since rates have improved since last Thursday I am going to recommend a locking stance.

Current Outlook: locking