US job openings remain near record high

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Published Date 10/11/2017

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 +3 bps yesterday. This wasn't enough to improve mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Location: Weekly Mortgage Applications dropped by -2.1% led by a drop off of -4.0% in Refinance Applications. Purchase Applications were flat at -0.1%.

Jobs: The August Job Openings and Labor Turnover Survey (JOLTS) showed a considerable amount of unfilled jobs just waiting for skilled workers and hit 6.082M which is a very slight pullback from July's level of 6.140M but still just below historic highs. This basically means that the labor market will continue to tighten with an Unemployment Rate of only 4.2%, we have a tremendous amount of open jobs, and the only way to fill them will be to pilfer employees from a competitor...and in the process pay up to get them to make the switch.

Treasury Auctions: Today we have both our 3-year and 10-year note auctions.

Fed: We will get the minutes from the last FOMC meeting at 2:00EST. We will also get a few speeches.

Dallas Fed Pres Robert Kaplan (voting member) said last night that he and candidate for Fed Chair Warsh “..we may disagree on some things. I think that’s a good thing....I am confident that a good decision will be made and the Fed will operate very effectively in the future, including if it’s Janet Yellen, who I think has done an outstanding job.” In regards to a December rate hike, he said: “I’ll be looking for evidence that we are making progress or likely to make progress over the medium term in reaching our 2-percent (inflation) target,”

Chicago Fed Pres Charles Evans (voting member) said: ”There is room for honest discussion later this year whether it is the right time to raise rates...the state of the economy is quite strong, unemployment low, the labor market is good."

S.F. Fed Pres John Williams (non-voting member) will speak at 2:40 today.

Today's Potential Rate Volatility: Average

Mortgage rates should remain relatively flat for the rest of the day. There's nothing on the economic calendar for the rest of the day that has the ability to move mortgage rates.

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.

Source: TBWS

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