Mortgage Rate Update May 6, 2011

Although the note rates on mortgages are mostly unchanged this morning pricing is worse (meaning it would take higher closing costs to obtain the same rate compared to yesterday).

As I pointed out in yesterday’s ‘rate update’ there has been little correlation between the jobs data in the ADP and Bureau of Labor Statistics (BLS) reports in the past.  That holds true again this month.  

Wednesday’s ADP payrolls report was disappointing.  It  showed that fewer jobs were created in the private sector for the month of April than analysts had expected.  On that news mortgage rates improved in anticipation that this morning’s BLS report would also fail to hit expectations.

However, this morning’s BLS report beat expectations showing that private payrolls grew by 268,000 in April.  That is the highest figure in 5 years!

Good news for the labor market is often bad news for mortgage rates and we’re seeing rates move slightly higher from multi-month lows.  Typically the outcome of the BLS jobs report will drive the direction of rates for the following couple weeks so I will remain in a locking position.

Current Outlook: locking