LOCK Ahead of Jobs Report Due Out Tomorrow

The Fannie Mae 30 year fixed mortgage bond is currently up 47 basis points on top of gains both Tuesday and Wednesday. This morning I posted the lowest rates ever to the website. Why the drop? The Federal Reserve Board announced yesterday they intend to purchase $600 Billion in bonds over the next 6 months. Though they will be purchasing Treasuries, not mortgage bonds, the influx of capital into treasuries will result in buying opportunities for mortgage bond investors. 

Lock or Float?

In my last post I warned that rates are headed up and I still believe that is the case. I advised to look for windows of opportunity to lock and here it is. The announcement from the Feds has pushed rates down but tomorrow morning at 8:30 AM the jobs report for October will be released. Analysts are expecting a gain of 60K jobs and I believe based on the ADP report that it could be more. Since these will almost all be private sector jobs, stocks will likely interpret the report positively and thus bond prices will go down/rates up. Advice: lock before 9:00 PM this evening. Remember, to lock your application must first be pre-approved so the first step is to apply online.