💸 Smoke & Jobs Mirrors

May 6, 2025
Mortgage News

Issue 117 – Hello and Happy Tuesday.

Reminder – This Sunday is Mother’s Day. Do NOT FORGET.

So the April jobs report came in hot, 177,000 new jobs vs. 130,000 expected, but let’s not get too excited just yet.

Every single month this year has been revised down. That headline number we all talk about? It’s basically a placeholder at this point. Add in the fact that over 393,000 of these so-called “jobs” came from the BLS’s best guess at small business hiring (which ADP says was actually more like 11,000)… and yeah, this one’s got some serious fluff baked in.

Bottom line: rates aren’t likely to spike on this. The Fed’s going to see right through it, and so should we.

Personal Note:

I am now in week 4 of not having my truck after the high-pressure fuel pump failed. Good news, it is under the recall warranty. The bad news is that they are on the 4th go-around of repairs. Good times!

Giphy

Still working from home!!

TLDR (Too Long Didn’t Read) Summary

⬇️ RATES – Small decline again this week.
📊 TECHNICALS – Jobs report hotter than expected.

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INTEREST RATES
Rates 📢 May 6th, 2025

10 year 3 – Month Snapshot

Product	Rate / APR	Weekly Change
⬇️ Conv.	6.750% / 6.829%	-.125%
↔️ Conv. HB	7.000% / 7.031%	-.000%
⬇️ JUMBO	6.625% / 6.681%	-.125%
⬇️ FHA 3.5% DP	6.000% / 7.002%	-.125%
↔️ VA 0% DP	6.125% / 6.346%	-.000%

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

📉 Why Rates Are Holding Steady:
Rates saw a modest improvement this week, dropping about 0.125% across most loan types. This movement is tied to falling oil prices (down to $57/barrel) and market caution ahead of the Fed’s Wednesday meeting.

With inflation cooling and weak economic data like negative Q1 GDP and rising loan delinquencies, investors are leaning into bonds—helping push mortgage rates slightly lower.

The Fed isn’t expected to cut rates, but its commentary will shape expectations for the summer.

TECHNICALS
Jobs Look Hot… But Are They Really?

The April Jobs Report showed 177,000 new jobs—well above the 130,000 expected. At first glance, this seems like strong growth. But before assuming this will push rates higher, let’s zoom in:

⚠️ Past job reports have been revised down every month this year (Jan: -32K, Feb: -49K, Mar: -43K). April might follow the same trend.
🧮 393,000 jobs were added by the BLS “birth/death” model, which estimates small biz job growth—but ADP only saw 11,000 in reality. That’s a massive discrepancy.
⏳ Unemployment duration hit 23.2 weeks, the highest since December—signaling a tougher job market than headlines suggest.

📉 What This Means for Rates:

Even though the headline number beat expectations, the Fed will likely look past it due to all the red flags:

✅ Slower private hiring
✅ Longer job searches
✅ Prior overestimations and downward revisions

🧠 Bottom line for agents:
This jobs report isn’t strong enough to derail the Fed’s path toward future rate cuts. Rates may stay range-bound short term—but weak labor data is a green light for better pricing in the months ahead.

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