The only constant about mortgage interest rates is that they do move. Depending on the economic news of the day rates will go higher or they will go lower.
Case in point was the first week of May. The much touted monthly employment numbers blew past expectations. Additionally, the numbers preciously reported for the preceding two months were revised higher. Total nonfarm payrolls were higher by 165,000 led by 176,000 new private sector jobs. Most were expecting a number closer to 125,000. The unemployment rate fell to 7.5 percent. Most economists expected the rate to hold steady at 7.7 percent.
Increased jobs were higher in transportation, financial services and health care. Job losses were seen in government and information services.
Construction jobs were off by 6,000 after rising 138,000 for the previous six months. The jobs numbers were revised upwards for February and March. February was revised to 332,000 and March to 138,000 The report was the catalyst for the stock markets. The Standard and Poors index reached 16,000 and the Dow Jones Industrial average reached 15,000, both represented new highs. Conversely there was a selloff in the bond market. The 10-year Treasury notes were yielding around 1.62 percent before the jobs report was released. The yield on the 10-Year notes ended the day at 1.74 percent. Mortgage interest rates track the 10-Year Treasury notes. Mortgage rates bounced higher after the jobs numbers were released. Rates generally speaking rose by around 1/8 in rate. The overall jobs numbers are encouraging.
They do point to an economy that is growing at a modest pace. The GDP numbers for the first quarter of 2013 showed a growth rate of 2.5 percent. Although positive, this is a modest pace. The effects of the government sequestration will likely be a weight in the second quarter numbers. Inflation remains benign. The rate of inflation is presently around 1.5 perfect. There is no cause for concern. Some inflation is good for the economy. Mortgage interest rates are still at very nice low levels. They are off of their recent lows, but not by much. Expect rates to keep in a relatively narrow range in the near term. It is still an excellent time if one needs a purchase or refinance mortgage.