San Diego Mortgage Rates Update 01/08/2010

San Diego mortgage rates remain unchanged after the December employment report announced a loss of 85,000 jobs. This was much worse than expected and put the national unemployment rate at 10%.  This was in contrast to November of 2009 where 4000 jobs were created and that was the first month since December of 2007 that we actually gained jobs vs. losing jobs.  Ironically, bad news in the labor market translates to good news for San Diego Mortgage rates. Less jobs means less consumer spending which in turn keeps price inflation in check. This is good for rates because the first thing the Fed does when they fear inflation is jack up rates to slow things down.

So what can we take from this report? Although the economy has stabilized we are not out of the woods and it is too soon to say we are in recovery. My heart goes out to the families affected by December’s loss of 85000 jobs but had we seen a better than expected report it may have put pressure on the Fed to raise rates over inflation worries. When the Fed raises rates it leads to higher consumer costs,  lower consumer spending and a further slow down in our economic recovery.

Most of my wholesale lender issued rate sheets unchanged from yesterday. The par 30 year fixed rate is in the 5.0% – 5.125% range for highly qualified borrowers. Highly qualified assumes a credit score of 740, loan to value of 80% and pay one point loan origination.   Have a great weekend and check back Monday for updates on San Diego Mortgage rates.