Job Growth Returning To “Normal” Levels — A Sign Mortgage Rates Have Bottomed

Job Growth Returning To “Normal” Levels — A Sign Mortgage Rates Have Bottomed

Job Growth (2000-2011)

Be prepared for Friday morning.

The Jobs Report : Coming Friday, 8:30 AM ET

Mortgage rates and home affordability could worsen tomorrow. At 8:30 AM ET, the Bureau of Labor Statistics releases its April Non-Farm Payrolls report and momentum has been strong.

The monthly jobs report is a market-mover and analysts expect that 196,000 new jobs were added last month. If those expectations are exceeded — by even a little — Wall Street would take it mean “economic strength” and the stock market would be boosted.

This might help your investments, but it would harm your mortgage rates. This is because, coming out of a recession, reports of economic strength tend to push mortgage rates higher. We’ve seen it happen over and again throughout the last 8 months.

Mortgage Markets are tied to The Jobs Report

Too bad for rate shoppers, though; a move like that would also lead to higher mortgage rates throughout California. This is because, coming out of a recession, reports of economic strength tend to push mortgage rates up. We’ve seen it happen multiple times in the last 8 months.

Since losing more than 7 million jobs between 2008 and 2009, employers have added 1.3 million jobs back to the economy. And we’re learning that there’s plans for fewer job cuts in the future. It’s clear that the jobs market is improving and this is why tomorrow’s Non-Farm Payrolls report is so important.

A “weak economy” helped keep mortgage rates low for a very long time. A strengthening economy will reverse that tide.Wall Street knows it, too. Each time there’s a data point that’s even mildly positive for the long-term growth of the U.S. economy, conventional and FHA mortgage rates jump.

It could happen tomorrow morning, too.

I Recommended to Air on the Side of Caution. Lock Right Now.

Today is a good time to lock for a number of reasons. First, mortgage rates have been trending lower lately. It’s always nice to buy on the dip. And, second, soft data from earlier this morning has mortgage markets on their heels.

Markets have knee-jerked moved toward lower rates and you can capitalize now. If you act quickly.

On a $300,000 loan, each 1/8 percent that mortgage rates rise adds $21 to your monthly mortgage payment.

Call me today. I love to work with my readers. I would be happy to plan out your next purchase or refinance. At Vintage Mortgage Group we offer many banking products from Va and FHA to USDA, Homepath, Conventional and Jumbo financing.

 

 

 

 

 

 

 

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