Mortgage rates are unchanged this week.
Now that the financial markets are back up and operating following the aftermath of Hurricane Sandy I expect some volatility over the next week because the calendar is jam packed with significant events.
Before we cover what’s ahead let’s review what’s happened. The financial markets were closed most of Monday and all of Tuesday following Hurricane Sandy. Initial estimates suggest the storm will cost about $40 billion in property damage and another $10 billion in lost economic output.
Given those bleak figures why didn’t stocks react poorly and mortgage rates improve?
Although the storm will initially hurt our economy it will act as a stimulus moving forward as communities rebuild.
Earlier today the private payroll company ADP released its version of the monthly jobs report. It showed the US economy added 158,000 jobs last month. Normally we discount the results of the ADP report as it rarely correlates with the all-important government jobs report due out tomorrow. However, ADP adjusted its methodology this month so it will be interesting to see if it becomes a better predictor for the government version.
Currently analysts are expecting about 130,000 new jobs to be announced tomorrow. Normally a number north of this figure would pressure rates higher and vice versa. I expect this release to have less of an impact because economists already know next months report is likely to be down given the storm.
Let’s not forget Monday is election day (make sure to get your ballot completed soon!). The results of the election will shape the leadership of our country as we deal with some crucial deadlines in the beginning of next year. We’re only .125% off all-time low levels. It may not be a bad idea to lock in.
Current Outlook: locking bias