Premier Lending Weekly Mortgage Market Update September 6, 2013

Posted by on Friday, September 6th, 2013 at 12:19pm.

Rates Higher Despite August Employment Report

Mortgage interest rates increased week over week despite today’s weaker than expected August employment report.  The unemployment rate fell to 7.3%, but the Labor Participation Rate fell to 63.2% which is the lowest rate since 1978.  The Labor Participation Rate tracks the percentage of working age Americans who are actually employed, or are seeking employment.  According to the Labor Department 312,000 dropped out of the workforce last month – meaning they are no longer seeking employment.  Non-farm payrolls increased by 169k, less than the 175k expected.  July Non-farm jobs were revised lower by 58k jobs and June Non-farm jobs were revised lower by 16k jobs. 
Other economic data was mostly positive.  Economic reports stronger than expected included the August ISM Manufacturing Index, July Construction Spending, weekly jobless claims, Q2 Productivity, and the August ISM Services Sector Index.  The ISM Manufacturing Index had its highest reading since June 2011 and the ISM Services Sector Index had its highest reading in six years. 
Markets still expect the Fed to begin tapering its Treasury and Mortgage Backed Security purchases at its September 18 FOMC Meeting despite today’s weaker than expected employment report.  Markets continue to monitor discussions of potential military action in Syria.

Wall Street Commentary

The Dow Jones Industrial Average is currently at 14,976, up about 160 points on the week.  The crude oil spot price is currently at $110.14 per barrel, up over $2 per barrel on the week.  The Dollar strengthened versus the Yen and Euro on the week.

Next week look toward Thursday’s Jobless Claims and Friday’s Producer Price Index (PPI), Retail Sales, and Consumer Sentiment Index as potential market moving events.

Rates

Currently, a Conventional 30 year fixed rate is hovering in the range of 4.625% to 4.75 % with no points.

 ** Mortgage rates are subject to daily market fluctuations and can change without notice.  Mortgage rates are also effected by down payment, occupancy, loan amount, credit score, lock period  and property type.

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