Lower Unemployment Drives Mortgage Rates Higher

Mortgage rates were up this morning after the unemployment rate came out and was actually lower, most economists believed the rate would go higher. The Bureau of Labor Statistics announced the unemployment rate went down to 9.4 percent in July, a decreased from the 9.5 percent  rate in June.

Because of the improved outlook on the economy and possibly the better unemployment rate banks are now offering fixed-rate 30-year mortgages above 5.50 percent, up from rates of around 5.20 percent in the beginning of this week. Which isn’t much higher than low home mortgage rates set a month ago of around 5.00 percent.

Mortgage rates will still be in this current range for the near future since inflation isn’t really a threat and the high unemployment rate will keep wage prices down, keeping inflation down. The Obama Administration also realizes the housing market is still in a depression so they will do all they can to keep mortgage rates low for the foreseeable future. The unemployment rate had been expected to go up to 9.8 percent last month.