Jobs, Market Insight, The Economy

What’s Your Mortgage Rate Strategy for April’s Jobs Report

Help Wanted by DNY59 | iStockphoto.comBeen shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move. 

It’s a risky time for Northwest Indiana and suburb of Chicago Illinois home buyers to be without a locked mortgage rate.

The action begins at 7:30 A.M. CT Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.

The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.

Click here to see today’s mortgage rates.

In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.

Non-Farm Payrolls 2000-2012

For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.

Click here to see today’s mortgage rates.

Based on the accuracy of those predictions, mortgage rates in Northwest Indiana and suburb of Chicago Illinois are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if actual number of jobs created falls short, mortgage rates should drop.

Job growth’s link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street’s growth projections for the economy. When that happens — especially in a recovering economy such as this one — mortgage rates tend to rise.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability in Northwest Indiana and suburb of Chicago Illinois.

Click here to see today’s mortgage rates.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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