We had a busy week with many news releases and the Fed meeting ending Wednesday. There were no surprises in the Fed statement Wednesday. The market had hoped for stronger wording on the continuation of the QE bond buying and the possibility of expansion but the language was similar to that we saw after the last meeting. In the end there was little reaction in the markets though mortgage backed securities (MBS) gave up a little bit of earlier gains causing rates to tick up.
The big day for the markets came Friday after the unemployment report released in the morning. New jobs created came in 10K higher than expected at 165,000. More importantly the February and March numbers were revised upwards by 114,000. The unemployment rate fell unexpectedly again and now stands at 7.5%. The fall in unemployment is largely attributed to fewer people looking for work. The Labor Force Participation Rate (LFPR) which is a simple measure of what percentage of people over 16 has job. This number is at a 35-year low of 63.3%. The market after a pretty slow week jumped on the news and the stock market rallied and bonds fell. Rates Friday saw the largest 1 day jump in quite a while.
Very little economic news is slated for release this week which will give the markets a chance to digest all the data from last week.
Mortgage rates are down slightly from a week ago. Despite the one day jump in rates Friday for the week rates were improved.
The 10-year US Treasury Note is at 1.74%, up .07 since last time.
Credit Spread (10yr UST vs. FNMA Current Coupon) 1.21, from1.33 last time. The narrowing explains why mortgage rates are down slightly while bond rates overall are up.
Current 30-year Fixed 3.375%. Jumbo 5/1 ARM 2.25%.
Of note, the conforming 5/1 ARM is now at 2.25%, the 7/1 at2.50%.
I am always happy to help with any mortgage questions and/or pre-approval.