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Jobs Report Pushed Mortgage Rates Lower 
The Labor Department reported this morning that far fewer jobs were added in September than most analysts were expecting. The September jobs report showed only 148,000 new employees. In the third quarter, total nonfarm payroll growth only averaged 143,000, much lower than the 182,000 per month average in the second-quarter and significantly lower than the monthly average of 207,000 during the first quarter.

The labor market participation rate, a measure of the people who are either employed or actively looking for employment, remained at 63.2%, the lowest level since August 1978. I was in high school and the unemployment rate was well above 7.2%

The jobs report caused the mortgage market to rally and interest rates to fall. My opinion is that this is not the last of the dismal jobs reports. If I am correct, the FOMC will have no choice but to continue QE3 well into the future.



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Will the September Jobs Report Move the Market 
The September Jobs Report will be released tomorrow morning, October 22nd, and could move the markets. The report was delayed due to The Shutdown. Consensus opinion is that we will see roughly 170,000 new jobs created in the month of September. A figure somewhat less than 170,000 will cause the mortgage market to rally and rates to go down. But if we see a slightly larger figure, say 180,000, then the hand-wringing will begin over when the FOMC will start to Taper.

Didn't we just stop talking about Tapering a couple of weeks ago? I don't think the economy is expanding and creating new jobs, at least not in my neck of the woods. I do believe that the Unemployment Rate could go down, based solely on the manner in which it is calculated. There is a flaw in the method/data.

I spoke with a very smart friend of mine over the weekend who shared an extremely interesting opinion. More on this later in the week.

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Rates End Week Slightly Lower ! 
The Conventional 30 year fixed rate slid to 4.125% by weeks end. This rate would be available for a borrower who has excellent credit and could be obtained with little or no points if you make the right size of down payment.

The Conventional 15 year fixed rate also dropped slightly to 3.25%, assuming the same parameters as mentioned above.

SHOULD I LOCK OR FLOAT?
Market conditions have changed since last Friday because The Shutdown is over and the Debt Ceiling has been increased. Unless you are going to closing and you have to lock, I feel that it is ok to float your rate. There may be some volatility so don't put your blinders on and ignore the market, but overall the risk should be outwieghed by the reward. Let it ride!


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Rates Remain Flat for the Week 
Mortgage rates remained unchanged from last Friday, although there is some upward pressure due to The Shutdown and looming Debt Ceiling situation.

The Conventional 30 year fixed rate was 4.25%. This rate would be available for a borrower who has excellent credit and could be obtained with little or no points if you make the right size of down payment.

The Conventional 15 year fixed rate was 3.375%, assuming the same parameters as mentioned above.

SHOULD I LOCK OR FLOAT?
You need to be very careful and watch DC for the resolution of the Debt Ceiling. If it isn't raised, then rates will increase. If you have a rate you like, lock it in!

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Yellen for the Federal Reserve 
It is widely expected that President Obama will appoint Janet Yellen to succeed Ben Bernanke as the Chair of the Federal Reserve. Yellen is expected to mirror Bernanke's policies which will be beneficial to the mortgage market. She must be approved by Congress, but it should be smooth sailing through the ratification process.

The potential for rough waters is in the minutes of the FOMC's last meeting. The FOMC chose not to Taper, but the vote was close, so mortgage market participants will analyze the document to determine why and see if they can frontrun the Fed.

My expectation is that the FOMC minutes will be a non-event. Let's hope so.

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