Jobless Claims Fall as Labor Market Continues to Tighten

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Published Date 12/7/2017

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways so far today.  The MBS market improved by +12 bps yesterday. This may've been enough to improve mortgage rates or fees.   The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The November Challenger Job Cuts report showed 35,038 announced corporate layoffs or firings which is an increase of 5K over October's pace. Still near historic lows but may hint at some softness in the labor market.

Initial Weekly Jobless Claims hit 236K vs est of 240K. The more closely watched 4-week moving average dropped to 241,500.

LinkedIn showed that hiring in November showed a 26% increase YOY. U.S. hiring has been 10.4 percent higher in 2017 than in 2016. LinkedIn's report is compiled from its 143 million user profiles in the U.S., 20,000 company profiles and 3 million monthly job postings.

Japan: Leading Economic Indicators 106.1 vs est of 106.2

Germany: Industrial Production 2.7% vs est of 4.3%

Eurozone: 3rd QTR GDP revised to 2.6% vs est of 2.5%

Today's Potential Rate Volatility: Average

Mortgage rates are setup for another relatively boring day. No major economic events scheduled and tax reform seems to be moving forward.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

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Daniel Harwood

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