Rate Update August 7, 2009
Mortgage rates are higher again this morning following a better than expected jobs report.
This morning’s jobs report was a good sign for the economy but bad for mortgage rates. The report from the Labor Department showed that the US economy lost 247,000 jobs in July, the lowest monthly job loss in 11 months. The unemployment rate fell by .1% to 9.4%.
The third component of the jobs report that can impact mortgage rates is hourly earnings. The report showed that earnings were up 2.5% on a year-over-year basis which does not raise inflationary concerns.
All in all, the report beat expectations. Mortgage rates have reacted higher on the news. We will shift to a floating bias. On the week 30 year fixed rates have risen .375% which is a fairly acute change. We wouldn’t be surprised to rates reverse lower next week.
Current outlook: floating bias