Mortgage Rates Sink After Strong Jobs Report

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Is the job market better than they say?

"Strong" Rebound For Payrolls

The latest Non-Farm Payrolls survey  shows 117,000 net new jobs created in July. The figure handily beat analyst estimates and surprised Wall Street investors.

In addition, the Bureau of Labor Statistics looked back at May and June's originally-reported figures and revised them both higher:

• May 2011 was revised higher by 28,000 jobs
• June 2011 was revised higher by 28,000 jobs

In other words, news of a sagging jobs market may have been grossly overstated; the jobs market may have been healthier than for what it's been given credit.

Unemployment slipped to 9.1 percent to July.

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Mortgage Rates Rally

The jobs report's strong readings would typically be a boon to stock market and a threat to mortgage rates.

This is because more employed Americans means more disposable income spent on products and services; and more taxes paid to governments at the federal, state and local level, a combination that fuels consumer spending and supports new job growth.

It's a self-reinforcing cycle that spurs economic growth and draw investors to equities.

This month, however, the market reaction has been different.

Since the Friday release of the July Non-Farm Payrolls report, the Dow Jones Industrial Average has lost close to 6 percent of its value. Furthermore, mortgage bonds -- which typically sink on a strong jobs figure -- have thrived.

High demand for bonds has pushed rates down.

Lowest Rates In History

If you've been shopping for a mortgage, or recently bought a home, use this week's action to your advantage. Mortgage rates have dropped to an all-time low. Finally.

Click here to get a free rate quote.