• Friday’s mortgage rates should be approximately .375 of a discount point lower than Thursday’s early pricing due to a surprise announcement late yesterday. The bond market is currently down 1/32 (4.17%).

 • Stocks are showing minor gains of 19 points in the Dow and 36 points in the Nasdaq.

 • Yesterday’s totally unexpected news from President Trump that he has instructed his representatives to purchase $200 billion in mortgage bonds caused a rally in related securities just after the trading day ended. It would be similar to what the Fed does during financial turmoil (Quantitative Easing - aka QE), but to a significantly smaller scale, with the intent being to an attempt to drive mortgage rates lower.

 • Realistically though, the $200 billion is just a drop in the bucket per se, meaning its impact on rates would likely be relatively minimal and only temporary. We certainly should accept the announcement as favorable for rates today. However, it isn’t going to significantly alter the path of mortgage rates over an extended period of time.

 • Today’s major economic news was December’s Employment report that revealed the U.S. unemployment rate fell to 4.4%, down from November’s revised 4.5%. This was a bit lower than the 4.5% that was expected, but November’s rate was revised from 4.6% to 4.5%. A declining unemployment rate is a sign of economic strength that is considered to be bad news for bonds and mortgage rates.

 • The report also showed 50,000 new payrolls were added to the economy, which was fewer than predicted. Lower than expected payroll growth makes bonds more attractive to investors and helps mortgage rates to move lower.

 • The third headline number in the Employment report is average hourly earnings that rose 0.3% last month and 3.8% year over year. Bonds tend to be sensitive to this reading because rising wages fuel inflation across the broader economy. December’s monthly increase in wages met expectations, but the annual increase was stronger than forecasted.

 • Closing out this week’s calendar was January’s preliminary reading to the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET.  They announced January’s reading stood at 54.0, rising from December’s 52.9. The increase indicates surveyed consumers feel better about their financial and employment situations this month than they did last month and are more likely to spend.

 • Next week has another packed calendar with several highly influential economic reports and other events scheduled, including two extremely important inflation indexes and a closely watched report on consumer spending. In addition to the data, we also have two Treasury auctions of long-term debt and a large number of Fed speeches taking place.

 • Monday doesn’t have any data scheduled for release, but the first of those relevant auctions is happening Monday and will come into play during afternoon hours.

 • Look for details on all of next week’s activities in Sunday evening’s weekly preview.

 • Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

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If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.