Portland Mortgage Market Update — May 3, 2024

It was Fed Week and Jobs week, and for once it seems like both playing friendly with rates. Starting with the Fed meeting- they unsurprisingly kept rates the same, but in the post-meeting press conference Fed Chair Powell kept a more doveish tone which helped interest rates. He acknowledged that inflation has remained stubbornly high, but said their current rate policy was sufficiently restrictive and did not see the need for further rate hikes. He also indicated (again) that if the jobs numbers came in showing higher unemployment that may be the impetus the Fed needs to start cutting rates again.

Speaking of the Jobs report, the BLS jobs report dropped today and it looks like things are starting to cool. The market estimated 204K new jobs being created and a 3.8% unemployment rate, and todays report showed an increase of 175K new jobs and a 3.9% rate. On top of that, there was a -22k revision made to previous jobs months reports. One interesting note in this months report is the birth/death model. This is a figure the BLS uses to estimate new jobs created based on new business opening up vs business closing for good. In short, it is not based on any real survey or report and it just a model, or educated guess, and is part of the reason why we have constant revisions in later reports when more data becomes available. This month's birth death model showed an increase of 363K jobs. By comparison ADP (who also releases a jobs report) has their birth/death model at an increase of 38K. So the 175K new jobs that are being reported in the headline number are definitely being propped up by this massive educated guess being made.

Weaker news in the economy is generally good for mortgage rates, and we are starting to see that trickle in as lenders release their pricing. Rates are now hovering back in the low to mid 7's.

That's it for this week! I am around all weekend so feel free to reach out with any questions