How the National Jobs Report Impacts the 10-Year Yield and 30-Year Mortgage Rates
If you’re in the market to buy or sell a home, you’ve likely heard how interest rates—especially mortgage rates—can change rapidly. But what many buyers and sellers don’t realize is that those rate changes are often driven by economic data that has little to do with housing itself. One of the most influential of these data points is the monthly national jobs report. This report can send ripples through the financial markets, influencing everything from bond yields to mortgage rates. Here's how it all connects.
What Is the National Jobs Report?
Each month, the U.S. Bureau of Labor Statistics (BLS) releases the Employment Situation Summary, commonly referred to as the “jobs report.” It includes:
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Nonfarm payroll growth: The number of jobs added or lost.
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Unemployment rate: The percentage of people who are actively looking for work but can’t find it.
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Wage growth: Average hourly earnings across the workforce.
This data helps paint a picture of the U.S. economy’s overall health, especially in terms of labor demand and inflationary pressures.
Why the Jobs Report Matters to Financial Markets
Investors and the Federal Reserve closely watch the jobs report because it signals the strength of the economy. A strong jobs report (high job creation, low unemployment, and rising wages) may indicate inflationary pressures. In contrast, a weak report suggests economic cooling and reduced inflation risk.
From Jobs Report to 10-Year Treasury Yield
Now here’s where the connection to mortgage rates starts:
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The 10-year Treasury yield is a key benchmark in the bond market.
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Investors buy and sell Treasurys based on their outlook for inflation and Federal Reserve policy.
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If the jobs report is strong, investors may fear inflation and expect the Fed to raise interest rates or keep them high. As a result, they may sell 10-year Treasury bonds, causing yields to rise.
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If the jobs report is weak, investors may expect the Fed to pause or even cut rates. This drives more demand for Treasurys, pushing yields lower.
How the 10-Year Yield Affects 30-Year Mortgage Rates
Mortgage lenders often base pricing for 30-year fixed mortgage rates on the 10-year Treasury yield, even though the loan term is longer. That’s because the average homeowner sells or refinances within 7 to 10 years, making the 10-year yield a good proxy for lender risk.
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When 10-year yields rise, mortgage rates tend to rise shortly after.
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When 10-year yields fall, mortgage rates generally fall too.
This relationship isn’t 1:1, but the correlation is strong. Lenders also factor in risk, investor demand for mortgage-backed securities, and inflation expectations.
Real-World Example
Let’s say the jobs report comes out and shows:
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300,000 jobs added (much higher than expected),
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Unemployment falls to 3.6%,
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Wage growth is up 0.5% month-over-month.
Investors might interpret this as a sign that the economy is overheating and the Fed will stay aggressive on interest rate policy. They sell off bonds, the 10-year yield rises, and mortgage rates follow, potentially climbing a quarter-point or more in a short span.
Why This Matters to Buyers and Sellers
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Buyers: A strong jobs report might push rates higher, reducing your buying power. If you're waiting for lower rates, keep a close eye on economic data like this.
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Sellers: Higher mortgage rates can cool buyer demand, especially in more price-sensitive segments of the market. Timing matters.
Final Thoughts
Understanding the link between the national jobs report, the 10-year yield, and 30-year mortgage rates can help you make smarter decisions whether you’re buying, selling, or refinancing. While we can't control the economy, we can watch it—and work with professionals who understand how these moving pieces impact the housing market.
Need help navigating today's market? Reach out—I'm here to guide you through it.
Engel & Völkers local real estate experts are engaged in over 1,000 locations worldwide. Contact me to connect you with an advisor precisely where you want to be.
Chad Behnken
Luxury Real Estate Advisor
Engel & Völkers Pikes Peak
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