"When the economy sheds more jobs than it creates, it's a sign that the economy is slowing. Mortgage rates tend to fall. Likewise, when hundreds of thousands of federal workers stop drawing paychecks, they spend less money. The slowdown in spending acts as a drag on the economy, applying downward pressure on mortgage rates. It's clear that around 750,000 federal employees have been furloughed during the government shutdown."
"Without an official employment report from the Bureau of Labor Statistics, lenders and other businesses rely on alternative information sources. One is payroll company ADP, which reported that businesses shrank payrolls by 32,000 jobs in September. Keep in mind that ADP's report doesn't count government jobs; it counts only private sector jobs, so it's a measure of underlying trends in the economy."
The average 30-year fixed-rate mortgage fell nine basis points to 6.25% APR in the week ending Oct. 9, based on rates provided to NerdWallet by Zillow. A basis point equals one one-hundredth of a percentage point. Job shedding and furloughed federal workers are reducing spending and exerting downward pressure on mortgage rates. The Bureau of Labor Statistics did not release the September jobs report because of the government shutdown, so lenders use alternative data. ADP reported private payrolls fell by 32,000 in September, and the Bank of America Institute noted unemployment payments are roughly 10% higher year over year.
Read at SFGATE
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