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Bart Castelli

Mortgage Rates Respond to Jobs Report

Friday, September 2, 2016 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 - Message

Today was the day everyone was waiting for - and it came in like a THUD. Mortgage rates are moving sideways once again today. Here are the key points that the news outlets are reporting on a continuous loop: Unemployment Rate 4.9%. This is unchanged from July. The market was expecting 4.8%. August Non-Farm Payrolls 151K, the market was expecting 180K. Average Hourly Wages increased by 0.1%, the market was expecting 0.2%. The Participation Rate remained at 62.8% Average Weekly Hours fell from 34.4 to 34.3. Now here is the big question - How are mortgage rates are viewing this? While no one can deny that this report is lighter than expected, but it actually is not a bad report. What I mean by that is that a couple of very important trends are still very much intact. The Non-Farm Payroll number from July was revised upward from 255K to 275K. That brings the more closely watched 3 month moving average to 232K which is very strong indeed. Average Hourly Wages did make yet another monthly gain, this time by 0.1% to $25.73. Year-over-year, it is still comfortably above 2.0% with a 2.4% reading. We did get another report from Manufacturing as Factory Orders in July just missed the mark but it was still a nice turnaround from June's disappointing number.Going into the long weekend I expect mortgage rates to stay flat and volatility to remain fairly low.Have a Fantastic Labor Day!

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