A new jobs report came out this morning and it revealed that the economy added fewer jobs in August than expected. While that is not good news overall it may prove to be useful to mortgage interest rates over the next several months.
The Federal Reserve has been pouring 85 billion dollars per month into the US economy in an effort to spur economic growth. As the economy has shown signs of improvement this year there has been a growing consensus that the Fed will taper that money flow as early as this month. Mortgage interest rates have risen since May in anticipation of the Fed taking its foot off the gas.
Today’s jobs news in conjunction with other signs that the economy is still struggling could mean the Fed will wait longer before it pulls back on its quantitative easing program. Some experts are now predicting the Fed will now wait until December before it starts tapering the QE2 program.
If that is the case it means we will have a window this fall where rates will stop increasing. That means now is the time to start the process of seeking a refinance or a home purchase loan. Most mortgages take several weeks to fund from start to finish so starting the process in early September normally would mean a closing in mid October.
Fill in the contact form in the sidebar right away to get more information on the available government mortgage programs. This fall may be an excellent time to benefit from the record low rates we have seen in recent years due to the Fed’s interest rate compression efforts.