Will the Employment Report affect Mortgage Rates?

[hardikvagadiya@gmail.com]

The consumer spending pattern is based on a simple equation:

Increase in earnings = increase in disposable income = increase in spending.

However, the ‘increase in earnings’ part is largely driven by the job market. As the job market gains health, it triggers new opportunities, investments and businesses. Individuals will return home with higher paychecks. They would be willing to spend more on goods and services, or their mortgage.

The points somehow are giving out a positive impact, but there are still some specks of ambiguity and uncertainty that are making investors to keep their hands off risky assets and turn towards US treasury debt. As the treasury yields fall, prices of mortgage backed securities rise, leading to a lower mortgage rate. What is your opinion – Will the wellbeing of the job market help strengthen investor’s confidence in stocks? Is this increase in disposable income enough for individuals to avoid missing mortgage payments, and to stop mortgage delinquencies from ‘break records’?