The July jobs report, released Aug. 1, was not the news the government or the country wanted to hear. So chagrined was President Donald Trump that he fired Dr. Erika McEntarfer, the head of the U.S. Bureau of Labor Statistics (BLS), citing claims that the numbers were “rigged.” The sparse 73,000 new jobs added in July contradicted the president’s narrative of a booming economy.
Regardless of the merit of the president’s theory, for real estate investors, the low numbers are not all bad news.
An Opportunity to Buy or Refinance?
The immediate reaction to the lower-than-expected employment figures was that mortgage rates plunged to a 10-month low of 6.57%, down from 6.74% on July 28, which remained unchanged for the following week. Homeowners and investors seeking a ray of sunshine are likely considering whether to refinance their loans now or wait for further rate drops.
“There’s a lot of opportunity out there for both homebuyers and homeowners,” Alex Elezaj, chief strategy officer at United Wholesale Mortgage, told MarketWatch of the current stagnant housing market.
Understandably, the housing industry in general supports the idea of stalled buyers and sellers reentering the market. “This dip in mortgage rates gives house hunters a window of opportunity to buy before summer ends,” Daryl Fairweather, chief economist at Redfin, said in a statement. “While housing costs are still fairly high, the recent decline in rates boosts purchasing power and improves overall homebuying conditions.”
Redfin calculated that potential buyers with a monthly budget of $3,000 gained an additional $20,000 in purchasing power since May, when the daily average mortgage rate peaked at 7.08%. “Combined with the surplus of…