There were almost 100,000 jobs added to the economy in March. But the number was significantly lower than previous months.
The slow level of job growth could be a sign that the economy’s growth is also slowing down.
If this is the case, then that means mortgage rates could begin to drop was well.
Last month, 98,000 jobs were added to the economy, as well as a revised 219,000 jobs added in February. March’s jobs report showed the weakest amount of growth since May of last year.
Even though jobs are still being added to the economy, there aren’t as many coming in as expected. There could be plenty of different reasons for the slowed growth, including poor weather in the northeast and a potentially slowing economy.
No matter the reason for the job growth report, this could end up helping home buyers.
With a weaker jobs report, the Fed is now less likely to raise their rate at the beginning of next month. By holding off another rate hike, home buyers will have a chance to get access to today’s low mortgage rates for a while longer.
Also, mortgage rates could end up dropping as a result of the jobs report. As the economy gets “weaker,” mortgage rates tend to drop.
Rates could even be reacting to the news right now.
About Non-Farm Payrolls
A survey of non-farming jobs is conducted each month to gauge the growth of the labor market. The data is presented the following month in the non-farm payroll report. Because employment is a central part of the economy, the non-farm payroll report is seen as one of the best economic indicators.
While the housing market and mortgage rates aren’t directly connected to the payroll report, they are bound to be affected by any large changes in the economy.
Last month’s report wasn’t “negative” since it still showed signs of economic growth, but the numbers were far below those that were expected. There were an expected 175,000 to be added, but the real number was far lower.
However, less-than-expected job growth doesn’t mean that the economy is doing poorly.
There are still jobs being added across the nation, and economists are expecting many more jobs to be added next month.
If the real reason for the slow job growth last month was weather, we’ll find at the beginning of next month.
How Do Payrolls Affect Mortgages?
This month’s jobs report could end up having a large effect on mortgage rates.
Rates have been dropping over the past few weeks, and they could end up dropping even further now. With job growth being lower than expected, it could mean that rates will continue to drop.
Home buyers should keep in mind that while the jobs report can influence mortgage rates, it doesn’t guarantee any change to mortgage rates.
In fact, rates could even move against the trend that would be expected from this type of report.
Job growth will likely rise back to the expected pace over the next few months, and this will put the economy back on track to growth at a healthy pace throughout the year. This will also increase the likelihood of a Fed rate hike.
Even if rates don’t drop over the coming weeks, they are bound to rise throughout the year. There are too many positive economic factors pushing rates higher.
Home buyers should check to see what rates are available to them before deciding whether or not to lock in on mortgage rates.