Mortgage markets return to some normal behavior

Happy Friday from Local Mortgage!

Mortgage markets seem to return to some normal behavior this week, trading mostly on economic data vs. political policy. Most economic data was generally stronger than expected, pushing rates up just a bit. We will end the week right at 6.5% for most 30-year fixed scenarios.

Wednesday’s widely anticipated GDP report showed a .3% decline in GDP. However, the results were heavily influenced by a 41% increase in imports, which makes perfect sense as businesses and consumers rushed to purchase items at pre-tariff prices. Most investors believe this surge caused the decline of GDP and that future GDP readings will counterbalance this quarter’s report as those goods are sold from inventories.

The other headline this week was this morning’s key Employment report. The economy added 177,000 jobs in April, well above the consensus forecast of 130,000. The unemployment rate remained at 4.2% and the average hourly earnings were 3.8% higher than this time last year. Overall, Friday ended up being the worst day of the week for mortgage markets.

Next week we will have a FED meeting on Wednesday. No reduction in rate is expected but investors will be paying close attention to the FED’s outlook for the remainder of the year.  

Hope everyone has a great weekend and thanks for reading.