Friday October 7 marked the latest jobs report coming in showing the new unemployment rate for the US economy. Mortgage rates rose on Friday on the news of the unemployment rate holding steady at 9.1%.
Mortgage rates usually improve upon the unemployment report because lately it’s been very dismal. The market action usually shifts to a sell off in stocks and that money usually is moved into bonds as mortgage rates improve, but this latest jobs report showed positive economic signs which caused the inverse to happen. Mortgage rates rose as money flowed into the stock market on Friday during trading.
Mortgage rates rose on the semi-positive economic news in the latest jobs report.
Economists were projecting that only 60,000 new jobs would be created in the last 30 days since the last jobs report. The actual number came in at 103,000 jobs which was better than expectations. 137,000 jobs were created in the private sector which offset government job losses. 137,000 jobs were created was better than the 83,000 private jobs expected.
What’s even more -last month’s jobs report initially showed zero job creations and then that figure was revised to show 57,000 jobs were created. These numbers reveal that we are presently not in a recession.
Mortgage rates actually ended up deteriorating Friday afternoon by 57 basis points. So for example if you were looking at a 30 year fixed-rate mortgage at 4% with no points. That same 30 year fixed-rate mortgage would have been 4% with the cost of .57.
*Remember that .57% is a percentage of the total loan amount you are borrowing.
For example on a $300,000 loan that translates to a $1,710 discount point fee. This is why it’s critical to make sure you’re working with loan officer who has their hands on the pulse of the bond market and can react quickly during market swings.
Mortgage rates rise in an unstable financial market.
Make no mistake, this is an unstable financial market and mortgage rates overall are still low, from a historical perspective . When we have big market movers such as the jobs report coming out showing us what the new unemployment rate is, that can easily swing mortgage rates in any direction… sharply.
Since the last Fed meeting, mortgage rates actually improved for about four non-consecutive days and then they have been deteriorating pretty much ever since. We had one day last week were rates improved significantly and the media went haywire.
Don’t be focused on the mortgage interest rate alone, but be focused on the mortgage program, the total payment, costs and whether or not you are going to be able to handle that payment for the next 360 months and then focus on the interest rate. If you focus soley on the interest rate ,you are going to drive yourself nuts as the market shifts, daily.
With this being said, it’s more than probable this week interest rates are going to start improving again.
This week will likely be favorable to locking in a competitive interest rate on a purchase or refinance mortgage.
Contact us for the most accurate mortgage interest rate information available throughout the day. Get a mortgage interest rate quote here. For the record, mortgage rates did rise on the latest jobs report.
RELATED MORTGAGE ADVICE FROM SCOTT SHELDON
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