San Diego Mortgage Rates had a great run last week and began this week the lowest they have been since January of this year. The movement lower was due to several poor economic reports released last week.
Last Friday, the Labor Department reported that 88,000 jobs were created in March. That was less than half the 192,000 expected. This was the lowest monthly job creations number since June 2012, and could signal a slowdown in the labor market this spring. The only positive note was that the number of job creations for January and February were revised higher by 61,000.
The media also reported that the Unemployment Rate fell to 7.6 percent, which is the lowest level since December 2008, but what they always seem to fail to explain is that the decrease can be partly attributed to the fact that 500,000 people left the workforce. That caused the Labor Force Participation Rate to fall to 63.3 percent: its lowest level since 1979, the year I was born.
As I stated above, the Jobs Report wasn’t the only poor economic report released last week. All the reports showed the job market contracting. The ISM Manufacturing Index was below expectations, ADP private jobs data was less than expected, planned job cuts were up 30 percent from last year, and the employment component within the ISM Services Index fell.
How did this affect San Diego Mortgage Rates?
Remember that weak economic news, like we received last week, often causes investors to move their money out of Stocks and into safe haven investments like Bonds. This includes Mortgage Bonds, which San Diego Home Loan Rates are tied. The string of poor economic reports last week, coupled with tensions in North Korea and the continued debt woes in Europe, helped Bonds and mortgage rates reach some of their best levels this year.
I was able to lock a client in at 3.25% on 30 year fixed FHA rate and term refinance of $310,000. At that rate I am able to give a credit for all the closing costs and pre-paid items like taxes and insurance for this client’s San Diego home loan. The APR is 4.113%, which appears high, but is due to the mortgage insurance premium that FHA requires.
What Could Affect San Diego Mortgage Rates This Week?
The second half of the week heats up with several important reports.
- Thursday: Weekly Initial Jobless Claims will be released. The report from last week showed that initial claims surged by 28,000 to 385,000, the highest number since November and much higher than expectations.
- Friday: The Retail Sales Report for March will be released and we’ll get a sense of consumer spending and see how consumers are feeling with the Consumer Sentiment Index.
- Also on Friday: The Producer Price Index will show us March’s inflation reading at the wholesale level.
In addition to the above reports, the minutes from the March meeting of the Federal Open Market Committee will be released on Wednesday. Traders will be watching this very closely to see if there is any mention of an end to the Fed’s Bond purchase program known as Quantitative Easing(QE3).
If you are interested in getting your own quote, please click HERE or feel free to give me a call at 619-312-0612. I am a 12 year veteran San Diego Mortgage Broker who works locally in San Diego. I look forward to helping you secure the best San Diego Mortgage Rate possible.