Bad Employment Numbers Good For Mortgage Rates

Today we saw the first real drop in mortgage rates this week. Employment numbers reported this morning showed weakness for the economy as the unemployment rate moved to 5.1% from a prior reading of 4.8%. The lablr department's report showed a net loss of 80,000 jobs last month. This news caused a rush to treasuries, which in turn brought down the 10 year yield to drop -0.1100 to a level of 3.4810%.

Its ironic how bad news in the economy relates to better mortgage rates. We saw a dip in rates today by up to 1/4% in response to the drop in treasury yield. I spoke with many clients today, advising to move on these dips. Mortgage rates are still near historic lows, but many people looking to refinance want to wait for better rates still. I can't tell you the number of times that I've had fantastic refi programs ready to go for clients that decided to wait, and missed out as rates rose significantly. The mortgage market has been moving back and forth in swift moves the entire year and those who waited out the January lows are still on the sidelines, wishing that they locked the low rates while they were available. Just as in the stock market, if you try to get in at the absolute bottom, you will never pull the trigger. If a refinance brings a significantly positive impact to an individual, waiting for months for rates to hit rock bottom can cost yo uin the long run. Figure the accrued savings never realized until you are able to (if you are able to) refinance. This can add up to thousands of dollars lost, so even if you do get a better rate by waiting, it may take years just to break even. I sometimes advise my clients that by waiting for another 1/8% t o1/4% drop in rates from an already solid low rate is not worth the risk as compared to the potential loss of benefit. Forgive my ranting, I'm off for the night to play a little guitar and get geared up for the Final Four games this weekend!