Mortgage Rates End Lower After Jobs Report

Mortgage rates finally took a step in the right direction this week after what seemed like a constant movement of them heading up this year.  What usually is a market shaker did not materialize this morning when we got the monthly jobs report of which overall came in below expectations.  This helped keep rates on the low side for the week, but still has kept them in the narrow range to hope that there is more of a direction to move lower.

Where Are Mortgage Rates Going?                     

>>> Rates have moved lower than in recent weeks

Today the employment situation for April got released (aka The Jobs Report).  That report comes out the first Friday every month and is one of the most closely watched reports that can shake the markets.  After a disappointing headline reading last month analysts were calling for the labor market to bounce back, but it did not as it was below the expectations at 164K, short of the 191K it was hoping for.  Average hourly earnings also missed the mark, coming in one tenth below what analysts had called for at 0.1%.

Jobs still strong, wages so far slower than most believed. The consensus after a full day of assessing the totality of the report is mostly a one-off report regarding job gains, and many interviewed on the media are dismissing the drop in average hourly earnings both monthly and annually.

Mortgage rates typically move higher when positive economic data comes out so a weaker report such as this one did keep rates from spiking. This was good news for anyone looking to buy or refinance right now.

After reviewing the Freddie Mac PMMS this week, it was interesting to read that “while mortgage rates have increased by one-half of a percentage point so far this year, it has not impacted home purchase demand, which continues to grow this spring. The observed buyer resiliency in the face of higher rates reflects the healthy economy and strong consumer confidence, which are important drivers of home sales activity.”

Rate/Float Recommendation           

>>> Lock now before rates move higher

Mortgage rates held steady this week which is great news for anyone looking to buy a home or refinance their current mortgage. It is possible that mortgage rates stay in a tight range for a while but it does seem as though there is a greater likelihood of them rising than falling.

If you want to avoid the risk of locking in after this happens, you should lock in your rate now. Despite what happens in the near-term, mortgage rates are still expected to move higher in the long run so locking in a rate sooner rather than later remains the smart decision for most borrowers. If you have any further questions, give us a call or visit our website at Call The Money Man.