Friday, July 8, 2011

Another Great Post on Mortgage Rates from my friend Dan Green

Mortgage Rates Dropping On Weak, Weak, Weak June Jobs Data

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Non-Farm Payrolls 2009-2011The Bureau of Labor Statistics released its Non-Farm Payrolls this morning. Mortgage rates are way down.

How Jobs Figures Change Rates

More commonly called "the jobs report", the monthly Non-Farm Payrolls report is closely-watched by Wall Street and economists.
Especially now.
We know the recession ended in 2009, but growth has been slower-than expected in the 2 years since. And, among all the reasons why, it's the sagging jobs market that tops the list.
Jobs are the keystone of the U.S. economy.
Without jobs, households earn less money, businesses make less profits, and government collect fewer taxes . That's 3 "bad things" and, in June, we got a lot of it.
According to the government, just 18,000 jobs were created in June. That number is well below expectations. Furthermore, a combined 44,000 jobs were removed from April and May's previously-reported figures. Unemployment Rate rose to 9.2 percent.
Click here for a mortgage rate quote.
For home buyers and rate shoppers, though, there's a silver lining in the Non-Farm Payrolls. A down jobs market is often good for mortgage rates.
Here's why:
  1. Fewer working Americans renders Wall Street less optimistic for the economy
  2. When Wall Street loses optimism in the economy, it sells stocks and buys bonds
  3. As bonds go in demand, bond prices rise and bond yields fall. This includes MBS.
When MBS yields fall, mortgage rates fall, too.  And that's what's happening today. Mortgage rates are cutting multi-week lows right now and approaching their best levels of the year. It's a pleasant turn after last week's rate spike.
Today is a great day to lock a mortgage rate.

Use The Jobs Report To Your Advantage

If you've yet to give your loan application, do it today. If you've to lock your mortgage rate, lock it today.
The market looks good, but there really isn't that much room for rates to fall.
Don't get greedy, in other words. Saving an extra 1/8 percent on your mortgage won't change your life. Losing an extra 1/8 will make you mad.
Start your loan process with a no-obligation online mortgage rate quote.
Dan Green

About the Author

Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan at dan.green@waterstonemortgage.com or call 513-443-2020.

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