Fall in mortgage rates after poor jobs report

After reported weak job gains and an increased unemployment rate, Freddie Mac recently released its Primary Mortgage Market Survey which found a drop in mortgage rates following long-term bond yields.

According to the survey, 30-year FRM this week averaged 4.51 percent down from 4.6 percent last week, 15-year FRM this week averaged 3.65 percent down from 3.75 percent last week, 5-year Treasury-indexed ARM averaged 3.29 percent this week down from last week's 3.3 percent, and 1-year Treasury-indexed ARM averaged 2.95 percent this week down from 3.01 percent last week.

Frank Nothaft, vice president and chief economist for Freddie Mac, said that weak job growth, rising unemployment and stagnated employee wages were significant.

"These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term," Nothaft said.

The U.S. Department of Labor recently released its June Employment Situation report which found the unemployment rate rose slightly to 9.2 percent, but the total number of unemployed persons has increased by 545,000 since March. While 18,000 jobs were created in June, this number is well below the market consensus forecast. Teenagers had the highest unemployment rate at 24.5 percent, closely following by blacks at 16.2 percent 

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