Guest Post – Tradition Mortgage’s Weekly Update September 9, 2015

Rates Stay Flat on Mixed Employment Data

Friday’s Employment report came in close to the forecasts overall, but did little to shed light the prospects of a Fed rate hike in September. Rates have traded sideways as investors wait for more clues to the upcoming Fed decision. A small shortfall in job gains was offset by stronger than expected wage gains and a decline in the unemployment rate. Against a consensus forecast of 220K, the economy added 173K jobs in August, but upward revisions to prior months added another 44K. The unemployment rate declined from 5.3% to 5.1%, the lowest level since April 2008.

Investors had been looking to the Employment report to provide more clarity on whether the Fed will begin to raise the federal funds rate at the September 17 meeting. The on target data provided little guidance, however, and investors remain divided. One reason is that recent comments from Fed officials have spanned the spectrum from fully supportive to strongly against. There is broad agreement that the performance of the labor market is on track to match the Fed’s conditions for a rate hike. Inflation, however, is much more debatable. Core inflation has held far below the Fed’s target level of 2.0%, and potentially slower economic growth around the world has reduced expectations for future inflation.

On a separate note, trading action in the stock market will continue to influence rates this week. Any stock rally will pull rates upward, but conversely, a drop in stocks will help push rates down.


Week Ahead

Factors: It’s a light week for economic reports. The JOLTS report, measuring job openings and labor turnover rates, will be released on Wednesday. The Producer Price Index (PPI), which focuses on the increase in prices of “intermediate” goods and services used by companies to produce finished products, will come out on Friday. The most influence on Mortgage rates will be exerted by trading action in the stock market.

Volatility: High
Trend: Slightly Higher
Today’s rate snapshot: 30-day lock rates as of 9/8/2015 08:35AM:
30-year Fixed (conforming): 3.875% (3.99%APR*) same as last week
15-year fixed (conforming): 3.125% (3.25% APR*) same as last week
7-year ARM (conforming) 3.375% (3.49% APR*) +.125% from last week
30-year Fixed (jumbo) 3.875% (3.99% APR**) same as last week
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!

Jim Krantz
Vice President
NMLS # 761955
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 /