Are You Buying Soon?

If you are considering buying, then timing a lock on rates could be key right now. Rates have skipped around a bit but are likely to go down in the near future. The question is how low will they go and when?

Some basic knowledge on rates and recent events:

"SURVEY SAYS...?" Richard Dawson's classic line on Family Feud is exactly the question that was on many minds at 8:29am ET last Friday morning, awaiting the official results of the November Jobs Report. After Automatic Data Processing (ADP) had released their hot numbers earlier in the week, indicating well over 200,000 new jobs created - traders and analysts began to wonder if Friday's official number might not come in far higher than the expectations of 70,000.

So when the results came in, it did show 94,000 new jobs created during November - but prior month's revisions took back 48,000 jobs previously counted in September and October. So...given this overall tame to semi-weak Jobs number - which generally would cause Bonds and home loan rates to improve - what happened that caused Bond pricing to worsen, and home loan rates to increase by .25%?

First, Bonds and home loan rates had recently improved to levels not seen in well over two years - so Bonds were almost looking for a reason to correct - and a few strong elements inside the Jobs Report were all the reason they needed. The Unemployment Rate stayed at a low 4.7%, which was better than expected.

Additionally, the closely watched Hourly Earnings number was up 0.5%, higher than anticipated, and the largest read in over two years. Higher wages and a tight job market are both inflationary...inflation is bad news for Bonds and home loan rates...hence the large worsening in Bond prices and home loan rates.

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