It's a dangerous time for home buyers in Metro Atlanta to be without a locked mortgage rate.
Friday morning, at 8:30 AM ET, the government releases its Non-Farm Payrolls report for September. More well-known as "the jobs report", Non-Farm Payrolls data has the power to move mortgage rates up or down.
Unfortunately, ahead of the release, we can't know which.
Last year, job growth more than doubled between August and September. If this year shows that same growth, Georgia mortgage rates are expected to rocket higher.
The connection between rising jobs and rising rates is a chain reaction-type link, and is often quite tight.
Jobs are a growth engine for the U.S. economy and mortgage rates are "made" based on future expectations for the U.S. economy. In general, when the economy is improving, it draws Wall Street into "risky" investments and away from "safe" ones.
Meanwhile, mortgage-backed bonds -- especially those from Fannie Mae and Freddie Mac -- are considered to be among the safest investment assets available. Therefore, as the size of the U.S. workforce swells, and economic projections increase, Wall Street tends to divest itself of its mortgage bond holdings which, in turn, increases the supply of mortgage-backed bonds for sale.
With more supply, all things equal, mortgage bond prices fall and this causes mortgage rates to rise.
This is why the September jobs report is important to today's home buyers and mortgage rate shoppers. A better-than-expected tally will result in higher mortgage rates.
In August 2012, the government reported 96,000 net new jobs created -- a sharp decrease from the month prior and a figure just shy of the metric's six-month moving average. The Unemployment Rate fell one-tenth of one percent in August to 8.1%.
For September, economists expect to see 120,000 net new jobs created, and no change in the national Unemployment Rate.
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