Good News=Jobs; But could this mean higher interest rates?

A Strong Jobs Report And The End Of Low Mortgage Rates

It's a tough week to be rate shopping. Rates are all over the place, and tomorrow could send them soaring.

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

Mortgage markets move all day, every day. We've proved that. But tomorrow, they could move more than what's typical.
At 8:30 AM ET, the Bureau of Labor Statistics releases its April Non-Farm Payrolls report. Mortgage rates and home affordability could get really bad, really quickly.
Consensus estimates call for a net 196,000 new jobs added last month. If those expectations are exceeded -- even by a tad -- Wall Street would take it mean "economic strengthening" and the stock market would rise.
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.
Employers have added 1.3 million jobs back to the economy since last year and we're learning that there are plans for fewer job cuts in the future. The jobs market is on a clear, upward trend.
It's why tomorrow's Non-Farm Payrolls report is so important.

Job Growth Is Tied To Mortgage Rates

Job growth is playing a large role in our nation's recovery. As more Americans find work, consumers, as a whole, have more disposable income and direct consumer spending accounts for 70% of the overall economy.
Job growth carries other upsides for the broader economy, too:

1. More workers on payroll means more payroll taxes paid. This helps local, state and federal governments meet budget.
2. More workers mean fewer mortgage delinquencies. Data proves that.
3. More workers means lower dependency on entitlements, currently 18% of total U.S. personal income.

All of these positives move the economic engine forward which, in turn, spur additional spending and even more job growth.
For mortgage rates, though, a rise in job growth would signal the end of the low rates. A sagging, slowing U.S. economy is one reason why mortgage rates were so low in 2010, after all. Once those conditions reverse, it follows that mortgage rates should reverse, too.
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.

Cut Your Interest Rate Exposure. 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.
Call your loan officer to get a rate quote, or use this online rate quote engine. It's free to use and you'll get a sense for where rates are right this very minute. Come tomorrow morning, mortgage rates could be much higher.
On a $300,000 loan, each 1/8 percent that mortgage rates rise adds $21 to your monthly mortgage payment.