Jobs Reports Miss Helps Improve Mortgage Rates

The much anticipated Jobs Report came out this morning and the report missed expectations by a wide margin.  The good news was that it allowed mortgage rates to improve to new lows not seen in two months.

Where Are Mortgage Rates Going?                     

>>> Rates fall after a disappointing jobs report

The big news today in the market is the employment situation for March, aka The Monthly Jobs Report. This report is almost always once of the most influential reports every month, and this time around was no different. The headline reading showed that 103,000 jobs were added to the U.S. economy in March, which was a big miss from the 175,000 that analysts had expected. It is even below the low end range of 112,000. The only good news of the report showed that the average hourly earnings did hit the expected mark with a 0.3% monthly rise.

In general, weak economic data tends to push investors away from stocks and toward safer-haven assets like bonds.  Excess bond-buying demand causes bond prices to rise and rates to fall. However, most economists were not too troubled by the headline reading, despite it being the lowest in six months. They see it as a one-off dip that is not reflective of the long-term trend. Nevertheless, that did not stop money from going out of stocks and into bonds, pushing down Treasury yields back below 2.80% to 2.78% today.

Mortgage rates typically move in the same direction as the 10-year yield and are similarly a little lower as we head into the weekend. As we saw in the Freddie Mac Primary Mortgage Market Survey (PMMS) yesterday, rates improved for the second straight week this week.

Rate/Float Recommendation           

>>> Lock now while rates are low

Today represents the best day for mortgage rates in roughly 2 months.  Next week brings a key inflation report in the form of the Consumer Price Index.  Investors are on the edge of their seats over the possibility of an increase in inflation.  If it happens, rates will likely snap back into the higher range seen in March.  If inflation stays flat or if it stumbles, recent rate resilience could get a second wind. If you need some help with your loan, give us a call or visit our website Call The Money Man.