Friday is here and so is the Monthly Jobs Report for September, which had a poor headline reading but some finer details that are putting upward pressure on mortgage rates as we head into the weekend. The good news for borrowers is that rates are moving off of very low levels for 2017, and have a ways to go before they get anywhere close to what would be considered high on an historical perspective. Read on for more details.
Where are mortgage rates going?
Rates up slightly after strong wage growth data
We’ve made it to Friday and that means that the Employment Situation (a.k.a. the monthly jobs report) has been released. It’s certainly a more interesting report than usual, with a headline reading of -33,000 for September.
That’s drastically below the consensus of 100,000 that analysts had predicted–and is even lower than the bottom consensus range of 0 jobs added. Typically, this type of headline reading would sound the alarms bells and send financial market participants into a frenzy as they scramble for the perceived safety of government bonds.
Click here to get today’s latest mortgage rates (Oct. 6, 2017).
There is one big caveat, however, that is keeping that from happening: hurricanes. The barrage of hurricanes that hit Texas and Florida in September were expected to have an effect on the labor market, and while analysts were clearly a little off, investors are still taking this month’s numbers to be a temporary swing instead of a sustained downturn.
To make the report even more interesting, wage growth saw a big jump in September with a 0.5% increase. That’s higher than the prior reading of 0.1% and the consensus for 0.3%. That now puts average hourly earnings at 2.9%, year over year. This good news has caused investors to move out of bonds and into stocks pushing up Treasury yields.
The yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is up four basis points right now to 2.39%. Mortgage rates generally move in the same direction as the 10-year yield so that means that rates are dealing with some upward pressure as we approach the weekend.
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Analysts have been calling for a gradual increase in rates over the coming weeks and months, which is why we’ve been recommending that anyone looking to refinance or purchase should act sooner rather than later.
What does this mean for me?
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Mortgage rates moved higher this week. The good news is that rates are still at very low levels for 2017, as we saw in the Freddie Mac Primary Mortgage Market Survey on Thursday, which had the average on a 30-year fixed rate just seven basis points above the year low. With rates expected to continue climbing over the coming weeks, we’re recommending that borrowers act sooner rather than later in order to try and get the better deal.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
Employment Situation
- See above for a run-down of the September jobs report
Fedspeak
- Atlanta Fed President Raphael Bostic at 9:15am
- Boston Fed President Eric Rosengren at 11:45am
- New York Fed President William Dudley at 12:15pm
- Dallas Fed President Robert Kaplan at 12:45pm
- St. Louis Fed President James Bullard at 1:50pm
Notable events this week:
Monday:
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- Fedspeak
Tuesday:
- Fedspeak
Wednesday:
- ADP Employment Report
- PMI Services Index
- ISM Non-Mfg Index
- EIA Petroleum Status Report
- Fedspeak
Thursday:
- International Trade
- Jobless Claims
- Fedspeak
- Factory Orders
Friday:
- Employment Situation
- Fedspeak
from Total Mortgage Blog http://ift.tt/2fY8Ekx
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