Following the Fed’s talk about tapering its bond buying purchases – which help mortgage rates stay low – the 10-year Treasury yield and in turn mortgage rates rose last week. According to Freddie Mac’s latest survey, the average rates for a 30-year mortgage rose .13 percent.
We’ve seen greater volatility in rates this week with an important Jobs Report coming out on Friday. The Jobs Report is likely to show a rise in both new jobs created and the unemployment rate as many of the pandemic benefits ended in September and Americans are now looking for work again.
Further evidence that the housing market remains strong came out last week a strong pending home sales index. So, even though inventory is down and prices are up 20% on the year, home sales and demand remain strong.
This serves as a great reminder that it’s still a great time to consider refinancing and accessing the equity built up in your home to pay off high interest debt or help with large purchases like college or purchasing an investment property. Contact me today to explore your options!
As I mentioned above, the main focus in markets this week will be on the jobs reports as we know the Fed Members will be watching the employment picture in the country as they make their plans to taper their bond buying.
Mortgage rates have been hovering at artificially low levels thanks to all the bond buying the Fed is doing and now that we know it’s changing, lots of volatility has been sparked. This volatility in markets and rates is likely to continue until the Fed announces exactly how and when they will be tapering. Markets do not like uncertainty and that’s what’s predominant at this point, so volatility and the trend of rising rates is likely to continue.
On that note, today we get a look at the first of the employment reports with the ADP report on private sector job creation. The consensus forecast for ADP’s September estimate was 428,000. The actual number came higher at 568,000. Though August’s estimate for a 374,000 rise in private payrolls was well below expectation, ADP accurately foretold what was lower-than-expected actual growth of 243,000.
Then, we’re on to the main event, Friday’s Jobs Report, which is predicted to show a rise of 475,000 new jobs for September following far weaker-than-expected growth of 235,000 in August that, however, followed gains of just over 1 million in July and just under 1 million in June. The low-end of the consensus range for September’s report is 250,000. The unemployment rate is expected to hover at 5.1 percent, but as mentioned earlier could come in higher.
I’ll be keeping an eye on all of it and the direction of rates for you!