Nervous About Mortgage Rates Rising? Lock Thursday — Ahead Of Friday’s Jobs Report
Mortgage rates have been falling since April but that momentum could reverse tomorrow.
The Bureau of Labor Statistics releases the July jobs report at 8:30 A.M. ET Friday. With a stronger-than-expected reading, mortgage rates should rise, harming home affordability. Jobs are a keystone in economic growth and growth is tied to rates.
Earlier this year, job growth went positive and reached as far north as 431,000 jobs created in May. That figure slipped negative last month, however, as the temporary, decennial census workers left the workforce.
Jobs matter to the U.S. economy. Among other concerns, unemployed Americans spend less on everyday goods and services, and are more likely to stop payments on a mortgage. These effects retard the economy, spur foreclosures, and harm home values.
The reverse is also true. More workers means more disposable dollars and, in theory, a stronger economy.
Analysts expect that a net 65,000 jobs were lost in July. Wall Street — and Main Street — have a big interest in those results.
Poor jobs data would likely result in a stock market sell-off which would, in turn, boost the value of government-backed mortgage bonds. This is because bonds tend to perform well when the economy is sagging and higher bond prices mean lower mortgage rates.
Strong jobs data, however, would likely push stock markets up and bond markets down. This would cause mortgage rates to rise. The stronger the employment figures, the higher mortgage rates should go.
So, if you’re happy with where mortgage rates are today and you’re concerned about what the jobs report may do to them tomorrow, consider talking to your loan officer about locking your rate as soon as possible.
Once the jobs report is released, it may be too late.
Related posts:
- Tying Friday’s Jobs Report To Rising Mortgage Rates
- Mortgage Rates Rapidly Rising On Jobs Data; More Risk Ahead For Friday
- Today’s Jobs Report Will Keep Mortgage Rates Highly Volatile
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
