October 2, 2009
October 2, 2009 by admin
Mortgage rates received another shot in the arm on Friday and continued to move lower for the month of October. Today’s economic news has initially sent the broad based equity markets lower, following a severe day of selling on Thursday. The headline news story of the day was the September non farms payroll report, which came in worse than most economists has predicted. For the month, the economy lost almost 270,000 more jobs and the national unemployment rates has moved up to 9.8%. This report is always one of the most influential reports that impact both the equity and bond markets. The immediate reaction in the bond market to the report was a drop in Treasury yields as investors looked for a safe have from equities. This action dropped the yield on the ten year bond down to 3.12%, the lowest level in the past eight months. The drop in yields is helping to further drive fixed mortgage rates below five percent for both thirty and fifteen year loan terms. The continued drop with mortgage rates is one of the bright spots with the pullback in the equity markets over the last two weeks.
The economy clearly is not going to recover as quickly as the most optimistic observers had hoped for. The challenge of growing an economy when unemployment continues to increase will be a major challenge and an issue the government and labor department will try to monitor closely. There was another key report released today which is impacting the markets. The report on factory orders dipped for the first time in the past five months, further indication that the economy will face some growing pains in the months ahead.