Jason Bernabei, TriCastle Realty
DEL MAR, May 7 2012 -- Gooooood Monday morning San Diego! I want to first take a moment today to
thank the followers of this column for your support. “Monday Morning Market
Watch” has generated a regular chorus of feedback since inception, not only on
Monday afternoon, but throughout the week. I appreciate your e-mails and
sharing your voices on the industry topics of the day. Keep them coming! Having
said that, let’s talk about the April Jobs Report and how it impacted mortgage
rates.
The
government's Bureau of Labor Statistics has just released its April Non-Farm
Payrolls report. The monthly Non-Farm Payrolls report, better known in this
neck of the woods as "The Jobs Report," affords a sector-by-sector
breakdown of the U.S. employment situation, and identifies the latest
Unemployment Rate. Before delving into April’s data, let me provide some
context, and show you what happened in the month prior. In March 2012, the U.S.
government reported 120,000 net new jobs created, which is just half the number
created during February, and the third straight month of overall declining job
creation. The Unemployment Rate fell one-tenth of one percent to 8.2% in
March.
The Jobs
Report released on Friday for the month of April issued an Unemployment Rate of
8.1%, down .1% from the preceding month, and the added 115,000 new jobs was
less than anticipated in what was already forecasted to be a bad month for jobs.
For April, many economists had expected 160,000 net new jobs created, and no
change in the national Unemployment Rate. Obviously, we came up short.
So how
does this affect mortgage rates? Had the actual number of jobs created in April
exceeded economist expectations, mortgage rates would have very likely risen. The
less than stellar jobs data meant good news for anyone with an unlocked loan in
progress. If your Loan Officer rolled the dice and held off on locking late last
week, he looks like he knows rates like nobody’s business, as post-Jobs Report
rates improved this morning.
Any
regular follower of my column knows by now that the relationship between Job
growth and mortgage rates is a symbiotic one. Jobs are an economic growth
mechanism and mortgage rates are based on economic expectation. Therefore, as
the number of people entering the U.S. workforce increases, as more jobs are
created, so do Wall Street's growth projections for the U.S. economy. When that
happens, the paradigm has been that mortgage rates tend to rise. Industry types
like myself understand this paradigm, and a decade’s worth of experience has
lead me to confidently conclude that during an overall bad economy, rates tend
to jump up quicker in relation to trending good economic news.
So though we
added more jobs this past month nationally, and have done so now for 18
straight months; the fact that even less jobs were added than what was
forecasted as an already less than stellar month, means that mortgage rates
have held low. But long time Loan Officers know better. LOCK N LOAD is the
theme of the day for loans in process. Call your Loan Officer today
and get in while the gettin's still good!
Until
next time San Diego, you can contact me, Jason Bernabei, at jasonb@tricastle.com,
and check me out each and every Monday on www.therealtyinsiders.com for
more, and be sure to tune in to see myself, and local industry experts
talking real estate on "The Realty Insiders," the ONLY real estate show
in town!
Jay's
Outlook: mostly sunny
Jason Bernabei, TriCastle Realty
