The downside to the positive jobs numbers is that it suddenly got more expensive to buy a home.
Word that US employers added 195,000 workers to the payroll last month, which was more than economists had expected, sent Treasury bond yields soaring.
For potential home-buyers, the concern is the spike in the 10-year bonds, which tends to track mortgage rates. As bond prices tumbled, yields hit levels not seen since 2011 — a sign that higher mortgage rates are sure to hit borrowers next week.
Yields jumped to as high as 2.73 percent, from 2.55 percent, on the report.
The bonds are reacting to the positive jobs data and fears that a strengthening economy will force Federal Reserve Chairman Ben Bernanke to ease up on his $85 billion a month bond-buying program.
Indeed, 30-year fixed mortgage rates jumped to 4.46 percent in June after Bernanke said the Fed is looking to pull back on their bond buying amid signs of an improving economy. That’s up from 3.9 percent in early June and 3.3 percent in early May.
Last week rates for a 30-year mortgage fell back down to 4.29, according to Freddie Mac, as bond prices — which move opposite yield — rose when Fed officials talked down all the talk about tapering.
But that is likely to change with the huge spike in yield yesterday.
Those that haven’t locked in their rate can expect to pay more for their dream home.