Mortgage rates have fallen following the release of a disappointing employment report for May.
Yields on mortgage bonds have fallen about one-eighth of a percentage point today, which is likely to correspond to a similar decrease in the rate for the 30-year fixed.
The impetus is the tepid May employment report, which was released this morning. Nonfarm payroll jobs increased by 431,000 in May, and 411,000 of those new jobs were temporary Census positions. Do the math and you can see that, without the Census temp jobs, this would be a dismal report.
The unemployment rate fell to 9.7 percent from 9.9 percent. Good news, right? Wrong. The unemployment rate went down because fewer people started looking for jobs. It's dangerous to read strangers' minds, but I assume that fewer people are looking for jobs because they have little expectation of success. That's ominous news.
With the prospect of an economy that might slow down even more, mortgage rates fall.