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Today’s Mortgage Rates Expected To Change On Friday’s Jobs Report

Posted January 7, 2015

Today’s Mortgage Rates Expected To Change On Friday’s Jobs Report

Non-Farm Payrolls: Current mortgage rates subject to change based on Friday's release of the December jobs report

Mortgage Rates And The Jobs Report

On the first Friday of each month, the Bureau of Labor Statistics publishes the Non-Farm Payrolls report. Commonly called "the jobs report", Non-Farm Payrolls highlights employment changes across 10 private labor market sectors including insurance and finance.

Wall Street watches Non-Farm Payrolls closely. The report affects today's mortgage rates. Among the reasons why is that the Federal Reserve's stimulus programs are linked to the U.S. jobs economy, and the Fed has actively worked to keep mortgage rates down.

December's Non-Farm Payrolls will be released Friday.

With a better-than-expected read, mortgage rates and APRs are expected to climb. With a worse-than-expected read, mortgage interest rates are expected to fall.

Click for today's live mortgage rates.

9.8 Million Jobs Added Since 2010, 167k Per Month

The Non-Farms Payrolls report is a broad look at the U.S. labor market. By industry, it shows which economic areas are expanding, and which areas are contracting. It also reports the U.S. unemployment rate.

Non-Farm Payrolls is a monthly Wall Street highlight. Job growth is paramount to economic growth, and economic growth drives investment strategy.

Recently, the jobs report's importance has been magnified. This is because the Federal Reserve is actively stimulating the economy and its programs will continue so long as the economy requires it.

Low mortgage rates spur refinances as well, which increase household savings and contribute to higher levels of consumer spending.

Freddie Mac reports the average 30-year fixed rate conventional mortgage rate at 3.87% nationwide, but that survey concluded last week. Current mortgage rates are closer to 3.75%.

Meanwhile, VA mortgage rates and FHA rates are even lower.

VA rates average 0.375 percentage points below comparable conventional loans; FHA average 0.25 percentage points below.

Many banks now offer mortgage rates in the mid-3s with equally-low APR. Home buyers are buying homes cheaply. Refinancing households are saving hundreds of dollars each month.

It's estimated that the typical household using the HARP program to refinance now saves more than 31% monthly. Use the home mortgage calculator to see how much money you can save.

How Jobs Affect Housing, Mortgage Rates

The U.S. labor market is tightly tied to housing. Jobs provide households with income, confidence and capital; and, confident persons are more likely to buy a home or relocate.

Meanwhile, as the number of buyers in a market grows, the supply-and-demand curve shifts, which results in higher prices for sellers and the creation of real wealth. This, too, can boost confidence.

Furthermore, employed persons are also more likely to be mortgage-approved.

Even before your first day of work, you can get a loan via the offer letter mortgage.

It's no coincidence that the labor market's recent rebound  has coincided with a rise in U.S. home values.

Nationally, sales prices are up between 20-25% as compared to earlier this decade with some markets -- including Phoenix, San Francisco and Los Angeles, among other --  rising nearly twice that amount.  

Rising home prices would typically be bad for buyer's purchasing power but 30-year mortgage rates are at their lowest point since May 2013. Home affordability remains near its highest point high in history and homes are selling quickly.

One-third of all homes sold in 30 days or fewer last month. 

With a strong jobs report Friday, mortgage rates are expected rise. You get less house for your dollar when mortgage rates are up. It may be prudent to lock a mortgage rate today.

Click for a quick, live rate quote.

Linking Job Growth To Future Fed Policy

Between 2008-2009, the U.S. economy fell into recession, catalyzed by the failure of Lehman Brothers; the near-collapse of mortgage lending; and the movement of Fannie Mae and Freddie Mac into conservatorship by the Federal Home Finance Agency (FHFA).

7.4 million jobs were eliminated.

Since that period, though, hiring has resumed. 9.8 million jobs have been added back to the U.S. economy -- a 131-percent recovery in terms of "employed persons". The jobs are not of equal pay or stature, but an increase in the number of employed persons is a net-positive.

Furthermore, unemployment rates have dropped, down more than four percentage points.

Should December job data read stronger-than-expected, the Fed may begin making plans to raise the Fed Funds Rate, which would suggest a strengthening economy and inflationary pressure. This would likely result in higher mortgage interest rates.

Analyst calls are for 245,000 net new jobs created in December, with estimates ranging from two hundred-two thousand to three hundred-five thousand.

Consider locking your mortgage rate before the Friday morning release is made. Rates are expected to change.

Compare Mortgage Rates Now

In November, the economy added 321,000 net new jobs. For December, it's expected to show 245,000. The jobs report releases Friday at 8:30 AM ET. Today's ultra-low rates could be at-risk.

Want low rates? Your best chance may be to compare and lock rates prior to the Non-Farm Payrolls release. Rates are available for free with no social security number required to get started, and with no obligation to proceed whatsoever.

Click to get rates now.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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