Have you been floating a mortgage rate? It may be time to lock.
At 8:30 AM ET Friday, the government's Bureau of Labor Statistics will release its November Non-Farm Payrolls report. Better known as "the jobs report", the monthly Non-Farm Payrolls figures provide sector-by-sector employment data, and tally the size of the current U.S. workforce size.
From these two elements, the national Unemployment Rate is derived.
Since topping out at 10.2% in October 2009, the Unemployment Rate has dropped to 9.0%. More than 2.3 million net new jobs have been made in the last 24 months.
Wall Street expect to see 125,000 more jobs added in November.
Depending on how closely the actual Non-Farm Payrolls data meets Wall Street expectations, Sandy rate shoppers could find that the mortgage market landscape has shifted beneath them. The jobs report is a mortgage-market catalyst and when its reported value differs from Wall Street expectations, the impact on mortgage rates can be palpable -- especially in a recovering economy.
The connection between the jobs market and the mortgage market is straight-forward -- as the jobs market goes, so goes the economy.
- When more people work, consumer spending increases
- When consumer spending rises, businesses expand and invest
- When businesses expand and invest, more people are put to work
Furthermore, employees and employers both pay taxes to governments. With more tax revenue, governments embark upon new projects which (1) require the hiring of additional workers, and (2) require the purchase and/or repair of additional equipment and supplies.
Employment can be a self-reinforcing cycle for the economy and that's why Friday's jobs report will be so closely watched. If the number of jobs created exceeds the 125,000 expected, mortgage rates will rise on the expectation for a stronger U.S. economy in 2012.
Conversely, if the jobs figures fall short, mortgage rates may fall.
Mortgage rates continue to hover near all-time lows according to Freddie Mac's weekly Primary Mortgage Market Survey. The average 30-year fixed rate mortgage is sub-4.000 percent nationwide, with an accompanying fee of 0.7 discount points. 1 discount point is equal to 1 percent of your loan size.
If you're under contract for a home or looking to refinance, minimize your interest rate risk. Lock ahead of Friday's Non-Farm Payrolls release.
Get your rate lock in today.