Mortgage rates continued to rise this week, following a positive reaction to strong economic data and employment numbers. The bond market opened today with some fluctuations from the close of last Friday.

Key Market Movements

• MBS down: At 8:33 AM, MBS were down -50bp after a stronger-than-expected Employment report.
• Further decline: At 10:00 AM, MBS were down -47bp (UMBS 30yr 5.0 at 99.25), around 56bp lower than yesterday at this time.
• Negative repricing: Some unfavorable repricing was seen yesterday due to the stronger-than-expected labor market data.

Strong Employment Data The economy gained 254,000 jobs in September, exceeding the consensus forecast of 140,000. Additionally, revisions added 71,000 jobs to the results for prior months. The unemployment rate decreased to 4.1% from 4.2%, and average hourly earnings rose 0.4% from August.

Stock Market Performance The Dow Jones Industrial Average was up 200 points.

Current Mortgage Rates For a 30-year conventional fixed rate mortgage, the par rate is 6.500% with an APR of 6.715%. This is based on a $400,000 purchase with a 20% down payment and a loan of $320,000. The monthly P/I payment would be $2,023.

Lowest Rate Available The lowest rate currently available is 4.990% with an APR of 5.677%. However, this rate requires a $16,970 discount point to buy down the rate. The monthly P/I payment would be $1,716.

Mortgage rates have increased in response to the strong labor market data. Borrowers should consider these rate changes when making their homebuying decisions.