We’re seeing some wider swings in markets so far this week as we await an important jobs report on Friday, and concern grows over covid variants, all of which is affecting bonds and mortgage rates this week.
Last week, mortgage rates moved mostly sideways according to Freddie Mac’s latest survey of average rates and so far this week we’ve seen some improvement, which could change at any moment as we’re expecting increased volatility this week and a big Jobs Report on Friday. Last week, the average rates for both the 15-year and 30-year ticked higher by a slight .02 percent.
Housing news last week revealed a drop in pending home sales. The media made a case for doom and gloom but in reality inventory of homes continues to hold back sales contracts and there are more cash buyers in the market – now at 24% of buyers – which means fewer applications for mortgages. Add to that home builders contending with shortages in appliances delaying the finishing of some new homes needed to alleviate supply issues.
Wednesday we get our first look at the employment picture with ADPs report on private payroll creation. The consensus forecast for July is 700,000. ADP’s June estimate for a 692,000 rise in private payrolls was very near the 662,000 actual result.
A rise of 900,000 is the consensus for July new job creation numbers expected to be released on Friday by the government. This after a higher-than-expected increase of 850,000 in June that, however, followed lower-than-expected results in May and April.
We are also expecting a 5.7 percent rate for unemployment following last month’s 5.9 percent as well as a slight increase in the workforce participation rate to 61.7 from 61.6.
Remember, as mortgage rates continue to drop and home values increase, opportunities abound for homeowners to refinance out of mortgage insurance, take cash out for upgrades to your home, or pay off higher interest debt. Use this environment to your advantage while it lasts! Reach out to me to discuss your options by leaving a comment below or calling/texting me at 818.307.6072.