Mortgage rates in Minnesota could begin to move higher beginning tomorrow morning. The Bureau of Labor Statistics releases its February jobs report at 8:30 AM ET.
Minnesota home buyers and rate shoppers in Saint Paul would be wise to take note of this. The jobs report is almost always a market-mover.
Remember last month.
Although net job creation fell well-short of expectations in January -- just 36,000 jobs were added -- the national Unemployment Rate dropped to 9.0%, its lowest level in 2 years. The marked improvement surprised many economists and sparked concerns about inflation within the investor community.
As a result, mortgage rates rose.
In the days immediately following the jobs report's release, conventional conforming rates across Minnesota jumped three-eights percent. That increase is equivalent to a mortgage payment increase of $22 per month per every $100,000 borrowed.
A similar spike may occur tomorrow.
Wall Street scrutinizes job growth because with more working Americans, there's more consumer spending, and consumer spending accounts for 70% of the U.S. economy. A blow-out number tomorrow would change expectations for the future, and lead Minnesota mortgage rates higher yet again.
The economy shed 7 million jobs between 2008 and 2009 and has barely made 1 million of them back. Tomorrow, analysts expect to see 183,000 jobs created. If the actual reading is lower-than-expected, mortgage rates should fall and home affordability will improve.
Anything else and mortgage rates should rise. Likely by a lot.
Therefore, if you're shopping for a mortgage right now, consider your risk tolerance. It could be that the best days are past us. Once markets open tomorrow, you can't get today's rates.
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