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Mortgage Update from Stuart Crawford 11.9.15

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Blog by Doug Ingersoll | November 9th, 2015

From Stuart Crawford at VIP Mortgage:
Well, we were in for a wild ride on Friday based on the employment figures released.  The comments from Fed officials and a much stronger than expected Employment report were both negative for mortgage rates on Friday and rates ended the week higher.
Many top Fed officials made speeches over the last few days, and they shared a similar message.  As the Fed's Lockhart put it, a rate hike is possible at the next meeting on December 16th, but that it is not a "certainty."  (Fed Chair Janet Yellen said essentially the same thing).  Each Fed official repeated that the decision will depend on the performance of the economy (nothing new there). 
With this in mind, Friday's stronger than expected Employment report caused investors to increase their expectations for a rate hike at the next Fed meeting.  Against a consensus forecast of 190K, the economy added 271K jobs in October, the strongest reading of the year.  Upward revisions to prior months added another 12K.  The Unemployment Rate unexpectedly declined from 5.1% to 5.0%, the lowest level since April 2008.  Average Hourly Earnings (an indicator of wage growth) also far exceeded expectations, and they were 2.5% higher than a year ago.  This report revealed strength in nearly every area. 
This week, the second biggest report of the month, Retail Sales, will be released on Friday (Retail Sales account for about 70% of economic activity).  Mortgage markets will be closed on Wednesday in observance of Veterans Day.
Stuart can be reached at 480.776.2954