The March Non-Farm Payrolls report is due for release Friday morning and mortgage rates are expected to move.Â Unfortunately for the home buyers and rate shoppers of Parkland , we canâ€™t know in which direction that will be.
The prudent play may be to lock your mortgage rate today.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. MoreÂ commonly called â€œthe jobs reportâ€, the release is a bona fide market-mover, month after month.
Depending on how the March jobs data reads, FHA and conforming mortgage rates could rise â€” or fall â€” by a measurable amount post-release. This isÂ because todayâ€™s mortgage market is closely tied to the economy, and the economy is closely tied to job growth.
The connection between jobs and mortgage rates is basic.
More workers leads to higher levels of consumer spending nationwide and consumer spending accounts for the majority of the U.S. economy.
In addition, when more workers are paid, more taxesÂ are paid, too. Local, state and federal governments collect more monies when payrolls are rising which, in turn, benefits projects that purchase new goods and services, and, in many cases, results in the hiring of additional personnel.
Job creation can be a powerful, self-reinforcing cycle.
Between 2008 and 2009, the economy shed 7 million jobs. It has since recovered half of them. Friday, analysts expect to count another 200,000 jobs created. If the actual number of jobs created exceeds estimates, look for stock markets to gain and bond markets to lose. This leads to higher mortgage rates â€” especially with the Federal Reserve zeroed in on the labor market.
If the actual number of jobs created in March falls short of expectations, however, mortgage rates may fall.
Unfortunately, by the time the report is released, it will be too late to act on it. The release is made at 8:30 AM ET and bond markets are closed for Good Friday.
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