Mortgage rates are better today.
After two straight solid employment reports (January & February) this month’s results were disappointing. According to this morning’s jobs report from the Bureau of Labor Statistics the US economy only added 120,000 new positions last month. Analysts had been expecting job growth of over 200,000. Bad news for the economy is often good news for mortgage rates and that is certainly being validated today.
As I stated in my first ‘rate update’ of 2012, “Sentiment over the European Debt Crisis will continue to drive the financial markets….Furthermore, until the US economy shows continuous signs of recovery we expect mortgage rates to remain near all-time lows.”
During the first quarter both the debt crisis and US economy showed significant signs of improvement pushing mortgage rates higher by .25%-.375%. But this week concerns over Spain and now the US economy are helping rates to move back down.
These conditions increase the likelihood that the Fed will implement another round of quantitative easing designed to keep long-term interest rates low. However, this is far from imminent and it remains to be scene if today’s jobs figure is a temporary blip or a the start of a longer-term reversal.
For now, I am going to recommend floating into Monday.
Current Outlook: floating