10Jan2014
Joe Farr

This Week In Mortgage Rates : What Was The Best (And Worst) Days To Lock Your Mortgage Rate

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Jobs Fall Short

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A big miss in the Employment report caused MBS prices to jump this morning. Against a consensus forecast of 200K, the economy added just 74K jobs in November. This was the smallest monthly increase in jobs since January 2011. Given that several other labor market indicators showed greater strength in December, some economists feel that bad weather was a major factor in the shortfall, as the construction sector was particularly weak. Upward revisions to the November data also offset the December results a bit. In another twist, the Unemployment Rate declined from 7.0% to 6.7%, well below the consensus for a flat reading of 7.0%, and the lowest level since October 2008. Looking below the surface, reported job gains accounted for just 0.1% of the decline, while a large number of people leaving the labor force was responsible for the remaining 0.2% decline. Average Hourly Earnings, a proxy for wage growth, fell slightly short of expectations. 

This chart of the current Fannie Mae coupon shows the price of mortgage-backed securities (MBS) from the weekly market open until the time of this post. The vertical-axis reflects MBS prices as measured in basis points. In general, 100 basis points correlates to a 0.25 percentage point change to mortgage rate.

When MBS prices rise, mortgage rates fall. When MBS prices fall, mortgage rates rise.

Today's mortgage rates are based on the chart above. Click to get today's live mortgage rates.

Mortgage-backed securities are the basis for most U.S. mortgage rates including conventional loans via Fannie Mae and Freddie Mac; and FHA, VA and USDA loans as determined by Ginnie Mae mortgage bond pricing.

MBS pricing provided by MBSQuoteline, a real-time mortgage market subscription service.

About the Author

Joe Farr is a 20-year veteran of the mortgage industry. He is MBSQuoteline's Director of Sales and Marketing. For up-to-the-minute MBS prices throughout the day, go to www.mbsquoteline.com. Start a free trial.
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