Employment Report April 2017 and Mortgage Rates

The employment report for April 2017 came out earlier this morning and for the most part it was a “non-event”.  While the reading came in higher than expectations at 211k non-farm job creations (expectations were for 185k new jobs) the hourly wage component came in line with expectations (.03).  After the report hit the news wires the Employment report for April, 2017 caused a short term spike in the 10y yield however within the hour the bond employmentmarket recovered and is generally flat for the day.  Heading into the weekend mortgage rates are also flat however some lenders may be a tad bit worse/better depending on loan volume.  

Unemployment dropped to 4.4%, in March it was at 4.5%.  Low California mortgage rates for next week look good as bond markets head into the weekend only slightly worse than how they started the week.  Looking at the economic calendar for next week it appears it will be a slow news day on Monday and Tuesday however on Wednesday (May 10, 2017) we have the 10 year auction which has the potential to move bond yields.  Thursday is the 30 year auction and on Friday we get the retail numbers and CPI.  If the auctions go well; and retail sales and CPI are weaker than expected we could see the 10 year move back below 2.30% and mortgage rates may improve as well.

Here are the basic bullet points from the news wire:

  • Headline NFP +211k vs 185k forecast
  • Previous reading revised lower to 79k
  • Average Earnings +0.3 vs +0.3 forecast
  • Unemployment drops to 4.4 vs 4.6 forecast

As we move through the Spring and into the Summer we may start seeing politics affect mortgage rates more and more.  As the current administration starts to move forward with their budget along with their attempts to repeal the ACA the markets may start to focus in on their actions or lack thereof.  The government is funded until September, 2017 however there is no certainty that by then a permanent solution will be found.  Mortgage rates may come under pressure if there are any funding issues that extend beyond August/September.

One last thing to keep an eye on; the French election this weekend.  If Le Pen wins that could bring some volatility back into the market as most investors believe the centrist candidate (Macron) will win.  If you are looking into refinancing your current loan or you are looking to buy a new home; feel free to contact us for a no cost – no obligation quote at 1-800-550-5538.  We offer industry low mortgage rates, a top rating with the BBB and the BCA along with excellent customer service.  We have nearly 15 years of experience and extensive knowledge of how to find the best terms for our clients.