| Good Afternoon! Hope you had a wonderful weekend and Super Bowl Sunday. It wasn’t much of a game until the 4th Quarter, but it was fun to hang out with my parents and sister’s family all day watching Golf, Olympics and then the Super Bowl. As soon as I hit send on my newsletter last week, news came out that the BLS Jobs Report was delayed from Friday to this Wednesday. So pretty much the entire paragraph below is the same…LOL! The first week of every month is Jobs week, which means it’s a crucial week that will pretty much dictate rates for the next 4 weeks, until we get the next jobs report in 4 weeks. We are at a very crucial point on the 10 YR Treasury as well. Should we get another downward surprise in the Unemployment Rate, the 10 YR Yield, along with mortgage rates, are going to drastically jump Friday Wednesday morning. Based on what I am seeing in the charts, we are going to be in the 4.20%-4.36% range on the 10 YR. Better jobs data this week will send us into the 4.36%-4.52% range and worse data will push us back down to the 4.20%-4.0% range. We will see what happens Friday Wednesday! Besides the BLS Jobs Report delay, we did get every other data release for Jobs Week, and they were all pretty bleak. More on that below, but we did start last week around 4.30% on the 10 YR Yield and as of this writing, we are right at 4.20%. The above paragraph still stands, but due to last weeks data we are closer to the 4.20%-4.0% range than the upper range. Hoping you have a wonderful week ahead! 1 Year Look at the 10 YR Yield:  Last Month’s Market Commentary: As a reminder, I talk about the jobs market a lot because when clients ask about where rates are going, the simple answer is, “Well, it depends on what the jobs market does.” If people want to see sub 5% mortgage rates, the Unemployment Rate is going to have to be @ 6-7+%. We are currently at 4.4%. ADP Private Payrolls – 22k jobs added in January vs anticipated 44k. The Year-over-Year trend in ADP payrolls has cratered to a mere +0.2% pace from +0.5% a year ago, +1.7% two years ago, and +3.8% three years ago. Challenger “Announced” Job Cuts – A +118% YoY (more than double) surge in layoff announcements to 108,435 (from 49,795 a year ago). Going back to 1993, when the series began, this has only happened six other times (in terms of such an elevated January level), and the last time was during the Great Recession in 2009 (and also occurred in the 2001-2002 economic downturn). The average for all Januarys going back in time is 83,585, so this latest figure is +30% above the norm for this time of year.JOLTS (Job Openings and Labor Turnover Survey) – Job openings, the poster child for future labor demand, plunged to 6.542 million in December from 6.928 million in November (revised down from 7.146 million) for a -5.6% month-over-month decline. Openings are now down nearly -13.0% year-over-year to their lowest level since September 2020.Revelio Labs – The softness seen in ADP is not an outlier. Revelio Labs reported 13,300 job losses in January in their non-farm payroll release. Their results gained prominence during last fall’s government shutdown, when official BLS data was delayed.Jobless Claims – Unemployment claims also point to cooling conditions. Initial jobless claims rose by 22,000 to 231,000, the highest-level since early December, while continuing claims increased by 25,000 to 1.844 million. Continuing claims have remained elevated for an extended period, suggesting unemployed workers are taking longer to find new opportunities. Job Data in Chart Form from David Rosenberg at Rosenberg Research: Challenger Job Data:  JOLTS Job Openings:  ADP Private Payroll Report:  The Relationship Between the 10 Year Yield and Mortgage Spreads & 30 YR Fixed Mortgage Rates Current Spread of 10 YR Treasury to 30 YR Fixed Rates is pretty much flat from last week at 1.84%. We are almost back to the long-term average of 1.50% – 1.80%. With a lower 10 YR yield (and with less volatility) and better spreads, I am showing the approximate ranges for mortgage rates based on the 10 YR yield (picture is from 2/2/2026).   Long-Term Mortgage Spread Chart (1970-2025):  This Week’s Economic Data & Reports: · MON – Consumer Inflation Expectations (3.1% down from 3.4%) · TUES –NFIB Small Business Optimism Index, ADP Employment Weekly, Retail Sales, Employment Cost Index · WED – MBA Mortgage Applications, BLS Jobs Report (Delayed from February 6), 10-Year Note Auction · THURS – Jobless Claims, Existing Home Sales, 30-Year Bond Auction · FRI – CPI (Consumer Price Index) People have asked where to track this stuff daily so here is the Bloomberg Website where you can see the reports/data: https://www.bloomberg.com/markets/economic-calendar Thanks for reading and have a great day!
Chris Hauber Mortgage Loan Originator Zenith Home Loans, LLC | |
