At the time I am writing this mortgage interest rates are marginally worse than they were last Friday.
The focus this week was on the unemployment numbers that came out today. Leading up to today the markets were quiet with investors not wanting to make any big moves before the unemployment figures came out. The head line of the report was that the unemployment rate dropped from 8.1% in July to 7.8% in August. However there was more to the report than just the headline. Job creation numbers were less than expected, so somehow the unemployment number decreased with few jobs being created. One explanation is that people who could not find the jobs they were looking for settled for part time jobs or low income jobs. There are also rumors flying around this morning about the data being manipulated by the current administration to make the job numbers look better going into the election.
The reason all of this data affects mortgage rates is that generally speaking bad economic news is good for rates and vice versa. Keeping that in mind unemployment going down would be good for economy but bad for rates. This report however did not have that big of an effect on rates, because of the weak job creation numbers. Another factor that muted the jobs report’s effect on mortgage rates is that the Federal Reserve (FED) is still heavily buying mortgage backed securities. Even though the report might have scared away some private investors for mortgage securities the FED is still buying them.
On Monday the markets are closed for Columbus Day. I believe the outlook is still good for rates unless today’s selling carries over to Tuesday.
