Strong employment report does little to derail the refi train

Despite a slightly stronger-than-expected January Employment Report, bonds continued to march higher on February 5, keeping interest rates near their lowest levels in almost a year. The unemployment rate in the United States dipped to 4.9 percent from 5.0 percent,  indicating that recent hikes in minimum wage and a warmer winter are possibly strengthening the labor market. Further, US workers saw a .5 percent increase in average hourly earnings, delivering some much needed wage inflation. Surprisingly, the US economy saw job growth in the manufacturing sector and has been under a constraint recently.

The report did little to take the markets’ concentration off of oil and the global equity markets. While the US Ten Year Note closed at 1.848 percent, the second lowest of the year, US stock markets continued to sell off. The DOW Jones Industrial Average closed down -211 points at 16,204. Crude Oil prices remained severely suppressed, closing at 34.15 per barrel.

Housing remains strong with new home sales in January growing 10.8 percent from the previous month. Home prices were strong as well with the S&P/Case-Shiller index for home prices growing by .94 percent month-over-month and an increase of 5.83 percent year-over-year. With mortgage rates at their lowest levels in the past year, it is a great opportunity to refinance. According to Freddie Mac, the average rate on a 30-year fixed rate mortgage slid to 3.72% percent this week, down from 3.79 percent the previous week.

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