Mortgage rates are higher across the board following Friday’s jobs report.
The all-important jobs report released Friday showed that the US economy added 165,000 new jobs in April. The Labor Department also revised previous estimates for February and March higher. All-in-all the report beat expectations causing stocks to rally and interest rates to rise. In Thursday’s ‘rate update’ I had recommended a locking bias headed into the report so if you followed that advice you were able to lock before rates rose.
After the release mortgage-backed bonds (MBS’s) sunk in price and rates rose by ~.125%. MBS’s are now trading up against the 200-day moving average which is a very important technical level of support. Should MBS’s close below this level for consecutive days it would be a signal that rates will continue to rise for the next few weeks.
The economic calendar is light this week so I expect mortgage rates to react to the aforementioned technical trading patterns as well as the stock market. I will recommend floating unless MBS prices drop below the 200-day moving average.
Current Outlook: floating