August Jobs Report Causes Mortgage Rates To Rise For The 3rd Straight Day

• Tweet

The first Friday of every month can be a real mortgage market-moving day. Today fits the description.

Jobs Are An Economic Keystone

On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls data for the month prior. More commonly called "the jobs report", the release is major factor in setting mortgage rates for Cincinnati homeowners.

Especially today; considering the economy.

Although the 2009 recession has officially ended, there's emerging talk of a new recession starting. Jobs growth -- or lack thereof -- is cited as a primary driver.

Support for the argument is mixed:

1. Job growth has been slow, but planned layoffs are at a 10-year low
2. Consumer confidence is down, but it's beating expectations
3. Consumer spending is weak, but it's not declining

In other words, the economy may be getting weaker as we speak.  Or, it may not.  Things could go in either direction between now and 2011 and the jobs market may be a key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a "big ticket" items such as a home.

With "Revisions", Jobs Were Added In August

Today, jobs growth was reported as "fair". According to the government, 54,000 jobs were lost in August, mostly reflecting the departure of 114,000 Census workers from the workforce.

The private sector (i.e. non-government jobs), by contrast, added 67,000. Furthermore, net new jobs was revised higher for June and July by a total of 123,000.

In other words, there was net jobs growth reported last month -- not loss.

In response, Wall Street is bidding up stocks at the expense of bonds -- including mortgage-backed bonds -- and this is causing mortgage rates to rise.  Rates are higher by 1/8 percent this morning.

Stop Waiting. Start Locking. Rates Won't Stay Low.

Mortgage rates rarely stay low for long and we've been on a 19-week winning streak.  Sure, you can sit and wait for the 30-year fixed to eke another 1/8 lower, or you could recognize that rates have much more room to rise than to fall.

The markets are a tightly wound coil and Wall Street is itching to unwind.  When it does, mortgage rates will rise and you won't want to be on the wrong side of that bet.

This is a Refi Boom.  Get your mortgage rate locked.  If you don't know how, start bywith some details on your situation and we'll take it from there.  I'll get you some ballpark figures based on what you share and, if you like what you see, we can follow up with a formal application for a loan.

Time is not your side, friends, and if jobs growth continues, the economy will recover and the Refi Boom will end.

(Adapted from Bring the Blog, a blogging service for mortgage and real estate types.)