Good Afternoon,
Today’s bond market has remained flat as expected, but I think tomorrow we will see some movement after the Labor Department releases the weekly unemployment figures. The consensus is 399K new unemployment claims. If the results are much higher than the expectations then we will most likely see rates go down depending on how much higher the actual numbers are. It can just as well go the other way; so follow up with us tomorrow to check in. I’m sticking to a lock suggestion for now because of the latest mortgage rate trends and I believe there will be more of a weakness in bonds for at least the next month or so.
Simply Put: If there is a significant amount more than 399,000 unemployment claims reported we might see rates go down, but if much less people claimed unemployment rates might go up. High unemployment levels make investors leery about placing their money in stocks because it shows weakness in the economy, so they would rather invest in “safer” bonds. As a result, mortgage rates go down. The exact opposite scenario will drive interest rates up.
Should I lock if I’m closing or plan to refinance within:
- 15 days? YES
- 30 days? YES
- 45 days? NO
- 60 days? NO
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August 21st, 2008 at 12:18 pm
[...] The unemployment figures were better than expected today, which was bad news for the bond market and interest rates if you are remortgaging. 448,000 new claims were expected, but the final figure was better at 432,000. Since less people claimed unemployment benefits, which negatively affects the bond market, rates slightly increased again today. This was only a weekly report, so it should not have such a tremendous influence, but since there was not much news scheduled, it definitely did not help our quest for lower rates. Read about unemployment. [...]
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