The national unemployment rate dropped to 8.1% in April with 115,000 new jobs being created. The job number was significantly lower than the March report of 154,000, and fell quite short of consensus estimate. Treasury Yields took notice and dropped below 1.90 again for the first time in quite a few trading sessions, helping to put some much embraced downward pressure on mortgage rates. This report, along with a statement out from Freddie Mac yesterday that the 30 Year Mortgage Rate is hovering at a historic low, is certainly welcomed news to Triangle Housing.
Triangle Housing continues to be the beneficiary of this less than stellar economic news, as the negative data helps mortgage rates improve, which helps to make affordability stronger, which in turns provides fuel to an area that has already seen some significant improvement in 2012.
The Unemployment rate is now at the lowest level we’ve seen since January 2009, but don’t be fooled by a declining number. The underlying reason we saw a decrease is due to fewer people actually looking for work, and therefore we must be careful that we don’t have a sense of false security due to the lower number. We must also remember that there are still a large number of underemployed individuals, meaning those who are working but at a much lower level of wage or skill type. The economy and the job picture are still fragile, and until the economic fundamentals strengthen, it will be some time before we can truly say that an economic recovery is in full swing.
Have a great weekend!