Mortgage Rates June 2, 2017

Today is the day; the day of the all important jobs report and it was a big disappointment which is good news for mortgage rates!  Mortgage rates for June 2, 2017 should be a bit better heading into the weekend and that’s because the market was expecting 185k new jobs and the reading came in at 138k; well below estimates.  Also earnings for the previous month were revised down (also good for mortgage rates) and manufacturing job creation was way below mortgage interest rateestimates as well (actually showed a decline rather than expansion).

So why is this good for mortgage rates?  Mortgage rates improve when the economy slows down (generally speaking) and/or wages stagnate or decline.  A huge part of the stock market expansion and bond yields rising, which started in November after the election, was based on he belief that the economy was going to generate a lot more jobs and wages were going to expand.  Some analyst were thinking a monthly average of 250k-300k new jobs per month and it’s becoming increasingly difficult to see if that will happen any time soon.  So without we are starting to enter a period in which the market is less optimistic that the economy is going to expand and that is why mortgage rates have improved over the last 4-6 weeks.  The best California mortgage rates for 2017 are still available heading into the weekend and the best thing that could happen next week (for long term mortgage rates to stay low) is a period in which stability and calm enter the market. A sharp move in the bond market in which yields drop most likely will not result in any significant improvement to mortgage rates; it’s best to be slow and steady with any drops in yield.

Right now we’re seeing the 10y yield at 2.16%; the lowest yield of 2017 and mortgage bonds are rallying as well.  If we see any significant improvement we will certainly update the post.  One other thing; keep an eye on oil.  It’s selling off this morning and some times has an influence on the bond market (if there is intense selling).  If you are considering a refinance of your current mortgage or looking to buy a new home please contact us directly for a no cost -no obligation quote at 1-800-550-5538.