Mortgage Rate Update October 3, 2016

Mortgage note rates are unchanged today but pricing at these levels is modestly worse.

It’s a relatively quiet day in the financial markets.  Earlier today a report was released that showed US manufacturing activity slightly stronger than anticipated.  Good news for the economy tends to be bad news for mortgage rates.

It’s a new month which means a fresh jobs report due out this Friday.  The markets are currently expecting ~170,000 new jobs created.  Last month only ~150,000 new jobs were created but the prior two months showed 200,000+.  In general a strong jobs report will pressure mortgage rates higher and vice versa.

That said, this month’s jobs report could react differently.  If the jobs number on Friday comes in well below expectations then it will become less likely that the Fed will hike rates this December.  The stock market would likely react positively which would hurt mortgage rates.  If the jobs number comes in stronger than expected then it would likely solidify a fed rate hike in December.  Since rate hikes are anti-inflationary we could see rates improve.

The technical signals do not look favorable so I will maintain a locking bias.

Current Outlook: locking bias