Setting up your home office

By Taff Weinstein at

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Setting up your home office

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 2.500 MBS) lost -77 basis points (BPS) from last Friday's close which caused fixed mortgage rates to move slightly higher from the prior week but closed the week at the second lowest rates in history.

Overview:  Mortgage backed securities (the only thing that mortgage rates are based on) closed the week out at their second best Friday on record. Of course the prior Friday was the best level on record.  The pullback in MBS was mostly due to the Federal Reserve pulling back the amount of direct purchases of MBS that they were making by $10B.

 

 

Domestic Flavor:

Jobs, Jobs, Jobs:  It was Big Jobs Friday last week!  You can read the official Bureau of Labor and Statistics report here.
Tale of the Tape:
Jobs
Non Farm Payrolls (NFP) March -701K vs est of -100K
NFP February revised upward from 273K to 275K
NFP January revised downward from 273K to 214K
The rolling  three month average is now -71K
Wages
The national average hourly earnings rate rose by 11 cents to $28.62 per hour.
The MOM gain in Average Hourly Earnings is 0.4% vs est of 0.2%
The YOY gain in Average Hourly Earnings is 3.1% vs est of 3.1%
Unemployment
The Unemployment Rate increased to 4.4% vs est of 3.8-4.0%
The U6 Under Employment Rate increased to 8.7% vs est of 7.1%
The Participation Rate fell to 62.7% vs est of 63.3%

Services:  The March ISM Non Manufacturing Report (2/3 of our economy) was much stronger than expected, showing an expansion at 52.5 vs market expectations for a contraction of 44.0

Manufacturing:  The March national ISM Manufacturing PMI was much stronger than expected (49.1 vs est of 45.0) but still showed contraction with a reading below 50.  Prices Paid ( a measure of inflation) dropped to 37.4 vs est of 41.2. The March bell-weather Chicago PMI was much better than expected (47.8 vs est of 40.0) but still was in contraction territory with a sub-50 reading.

What to Watch Out For This Week:

 
 
The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

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