California Mortgage News

Against a consensus forecast of 220K, the economy added 223K jobs in April. The figures for March were revised lower from 126K to 85K. Despite the weakness seen in much of the other recent data, the economy has added an average of roughly 200K jobs per month so far this year. The Unemployment Rate has declined from 5.6% in December to 5.4% in April. This was the lowest level since May 2008.

Perhaps more influential for mortgage rates, Average Hourly Earnings were just 2.2% higher than one year ago, which was lower than expected. Wage growth has remained close to this level for over a year. It generally takes wage growth of 3.0% to 4.0% before it exerts upward pressure on the overall inflation level. Since mortgage rates are determined based on expected future inflation, this wage data was positive news for mortgage rates. 

Solid job growth with low wage gains is a nice combination for both stocks and bonds. It adds little pressure for the Fed to bring forward the timing of the first federal funds rate hike. The stock market rallied on the news as well.

Today’s National Average Rates:

30 year fixed mortgage 3.8% Rate,  3.92% A.P.R.

15 year fixed mortgage 3.02% Rate, 3.18% A.P.R.

1 year adjustable mortgage 2.46% Rate, 3.05% A.P.R.