08 Jul Great time to lock!
The Bureau of Labor Statistics released their estimate for new jobs created in the US labor force, and it was a blockbuster. 287,000 new jobs were reported, which was significantly higher than the 180,000 anticipated by the markets. Although on the surface this appears to be phenomenal news, a deeper look into the report shows that 90% of the new jobs were created in the age bracket of 55 and older. This brings into question the types of jobs and longevity of the majority of the new hires made. The 55 and older market has been exceptionally hot following the recent increases in minimum wage that many states have experienced. It appears that if employers are being forced to pay higher wages, they are seeking the experience and talent of the 55 and older market.
Another important component of the release is the Average Hourly Earnings component. Wage growth ticked up .1% this month, making the year to date increase up to 2.6%. This is a healthy number and one that supports continued growth in home values. A 2.6% annual growth of income would accommodate a 13% or so rise in home prices, without adversely affecting home affordability.
A step up in the Labor Force Participation Rate caused the Unemployment Rate to move up from 4.7% to 4.9%. However, it is still a healthy number and below the 5% threshold.
In spite of such a strong Jobs Report, mortgage bonds are holding steady. With rates remaining near all-time lows, now is a great time to lock.