Mortgage bond prices finished the week lower which pushed interest rates slightly higher. Interest rates were higher the first portion of the week. The trade deficit was higher than expected. Productivity was unchanged and labor costs rose 2.5%. Analysts expected a slight decrease in productivity and a cost increase of 2.1%. ADP payrolls showed the economy added 235,000 jobs. That data was much better than the 193,000 jobs traders expected. The Fed Beige Book released earlier this week cited growing “labor shortages” in most districts. Higher than expected weekly jobless claims reversed some of the earlier interest rate increases. Claims printed at 231K versus the expected 220K. Unemployment was 4.1%. Payrolls rose 313K versus the expected 200K. We ended the week worse by approximately 1/4 of a discount point. What is your home worth?
To make wise interest rate lock decisions everyone needs to be aware of two primary risks. Those are price and event risks. Price risk is simply where the market stands since regularly scheduled morning pricing. Event risk is the economic data that is heading our way. Most interest rate changes come in response to an economic release. A borrower that chooses to float interest rates in front of economic events takes a very big financial risk. What is your home worth?
Floating overnight when there is little data and positive movement since pricing is a calculated risk. Floating with losses ahead of a significant release is a gamble. Most borrowers would be wise to take advantage of current interest rates and then refinance your mortgage in the future if rates fall. Call today to prequalify!