Job Stimulus Package Threatens Lowest Mortgage Rates

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The jobs recovery appears to have stalled. For rate shoppers nationwide, it's good news. Mortgage rates are dropping.

Weak Jobs Data Pushes Mortgage Rates Lower

Last Friday, in its monthly Non-Farm Payrolls report, the Bureau of Labor Statistics reported that the U.S. economy added exactly zero new jobs in August. The national Unemployment Rate held steady at 9.1 percent.

Despite the "zero" reading, though, the overall jobs reading was in the red. This is because the BLS issued revisions to its June and July data that adjusted the previously-reported figures down 58,000 jobs.

Economists had expected a monthly reading of +75,000. Plainly, their estimates missed. The weaker-than-expected data fueled a stock market sell-off that pushed stocks down 2.5% and spurred a bond market rally.

Mortgage rates have cut new all-time lows.

Click here for a mortgage rate quote.

Job Growth Is Tied To Mortgage Rates

Job growth matters to economic growth, and economic growth matters to mortgage rates.

Here's just a few of the benefits more workers have on the economy :

1. More workers on payroll means more payroll taxes paid. This helps local, state and federal governments meet budget.
2. More workers mean fewer mortgage delinquencies. Data proves that.
3. More workers means more consumer spending, which comprises 70% of the economy

These 3 elements push the U.S. economic engine forward which, in turn, spurs additional spending by business, consumers and government, and, therefore, even more job growth.

A slowing, jobless U.S. economy is one reason why mortgage rates have been so lately. An improving economy would erase that. Wall Street knows it. It's why this week's presidential address was so hotly anticipated -- the promise of job creation has long-reaching influence on the bond market.

Get Mortgage Rates While They're Still Low

If you're looking for a home, or comparing rates between lenders, finish up your shopping soon, friends. Mortgage rates are low today and low rates can't sustain -- not at the current levels anyway.

Mortgage rates are bound to rise and, when they do, they will likely rise quickly.

Click here for a mortgage rate quote.