Mortgage markets improved last week on stronger-than-expected economic data and safe haven buying.
The holiday-shortened trading week amplified what should have been modest gains into large ones.
Conforming mortgage rates dropped by about a quarter-percent last week, dropping them near their best levels of the year -- and of all-time.
Oddly, mortgage rates are falling as the U.S. dollar weakens.Â This is atypical because mortgage bonds are repaid in U.S. dollars.Â When the value of the dollar is falling, therefore, the value of holding mortgage bonds become less over time.Â
Investors are snapping up bonds with fury, however.Â Partially becauseÂ of lingering concerns related to Dubai, and partially because of faith in theÂ U.S. economy's long-term health.
This week, those beliefs could be shaken to the core -- specifically because of Friday's jobs report.
It's no secret that the economy is growing.Â Housing is improving, banks are re-capitalizing, and businesses are making capital investment.Â However, employment is lagging.
More than 4 million jobs have been lost this year and the unemployment rate is north of 10 percent for the first time since 1983.Â Consumers are worried for their jobs and are guarding their wallets the holiday season as a result.Â
The economy can't grow without consumer spending, though,Â and that's why Friday's job figures will play an especially large role in mortgage markets. If employment data goes positive, stock markets will rally at the expense of mortgage rates.
Conversely, if data looks worse, mortgage rates should dip.
Either way, it's a gamble.Â If you haven't looked at the benefits of a refinance lately, waiting until Friday to see what happens may be ill-advised.Â This is because the last two times mortgageÂ rates fell this low,Â markets corrected within 48 hours, sending rates soaring higher.
Rates look good today. Consider locking something in before rates have reason to rise.
Elva A. Wormley
Your Mortgage Consultant for Life
Phone: 408.615.8500 Fax: 408.519.5983
Cobalt Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128-3158
Please visit my website for current rates: http://www.besthomeloanadvice.com