Archive for Jobs
What’s Ahead For Mortgage Rates This Week : May 14, 2012
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Mortgage markets worsened slightly last week as positive U.S. economic news overshadowed growing concerns for the Eurozone’s future. Political and economic issues continue to weigh on Greece and Spain, and it’s still unknown how France’s new President will change that nation’s fiscal direction.
Conforming mortgage rates in Wisconsin edged higher on the week overall.
Last week was light on economic data, but the figures released suggest an improving U.S. economy.
For example, the Bureau of Labor Statistics reported 3.7 million job openings nationwide this past March, marking the highest amount since July 2008. Voluntary separations (i.e. “quit jobs”) increased, too — also at levels not seen since 2008.
Voluntary separations may hint at labor market improvement because employees rarely leave a steady-paying job without the prospect of a new job ahead. Furthermore, the four-week moving average of first-time unemployment claims fell for the first time in a month.
The jobs market is one of two key sectors expected to lead the economy forward this year.
The other is housing and, this week, there will be two key housing reports for Wall Street to review. The first is Tuesday’s homebuilder confidence survey from the National Association of Homebuilders. The second is Wednesday’s Housing Starts data for April.
Mortgage rates may also be affected by the Tuesday release of the Retail Sales report and Consumer Price Index report; and, by the Federal Reserve’s Wednesday release of the FOMC Minutes from its last meeting.
For home buyers and mortgage rate shoppers, mortgage rates remain at all-time lows. According to Freddie Mac, the average 30-year fixed rate mortgage rate nationwide is 3.83% for borrowers willing to pay 0.7 discount points and a full set of closing costs — the lowest rate-and-fee combination in Freddie Mac’s recorded history.
However, low mortgage rates may not last much longer — especially if the Eurozone can reverse course on its ailing economies.
Mortgage rates remain volatile and sensitive to changes in market conditions. If today’s mortgage rates fit your budget, consider locking in.
Fewer Jobless Claims Suggests Higher Home Prices Ahead
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Economists believe the strength of the 2012 housing market will be closely tied to jobs. If they’re right, the housing market is ripe for a boost. It spells good news for Delavan home sellers and may mean the end of bargain-basement prices for buyers.
Since peaking in mid-2009, the number of U.S. workers filing for first-time unemployment benefits has dropped 44 percent. Over the same period of time, the U.S. economy has added more than 2 million jobs and the national Unemployment Rate is down more than 1 percentage point to 8.3%.
Employment’s link to the housing market of Geneva National is both economic and psychological.
To make the economic link is straight-forward. A person with a job earns verifiable income and such income is required in order to be mortgage-eligible. For conventional and FHA purchase loans, for example, mortgage lenders want a home buyer’s monthly income be more than double his monthly debts.
For the formerly unemployed that have since returned to work, having a full-time income makes buying homes possible. It also supports higher home valuations nationwide because home prices are based on supply-and-demand. All things equal, when the number of buyers in a market goes up, prices do, too.
The psychological connection between housing and employment is a tad more complicated, but every bit as important. It’s not just out-of-work Americans that don’t look for homes — it’s fearful Americans, too. People with concerns about losing a job are just as unlikely to shop for homes as people actually without a job. The same is true for people unsure of their prospects for a better-paying job, or their own upward mobility.
A recovering job market can lessen those fears and draw out buyers — especially those who face a loss on the sale of an “underwater” home.
The Initial Jobless Claims rolling 4-week average is at its lowest level since 2008. Fewer Americans are losing jobs, and more are finding permanent placement.
It’s one more reason to be optimistic for this year’s housing market.
What’s Ahead For Mortgage Rates This Week : November 7, 2011
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Mortgage markets improved last week as optimism for a Greek Bailout program faded, triggering a global flight-to-quality assets. Fear of a Eurozone rift outweighed positive economic remarks from the Federal Open Market Committee and an in-line U.S. jobs report.
Although the Federal Reserve said the economy had “strengthened somewhat“, a statement backed up by Friday’s Non-Farm Payrolls data which — with revisions — met analyst expectations, concern that Greece may not receive its aid caused mortgage to fall.
Conforming mortgage rates dropped throughout Wisconsin Monday and Tuesday, pushing rates to near their lowest levels of the year. Rates remained low through Friday.
According to Freddie Mac’s weekly mortgage market survey, the average 30-year fixed rate mortgage is 4.00% nationwide, plus closing costs and an accompanying 0.7 discount points.
A “discount point” is a one-time loan fee paid at closing, where 1 discount point is equal to 1 percent of your loan size.
As an example, 1 discount point on a $300,000 home loan costs $3,000.
This week, with no new economic due for release, the fate of mortgage rates in Lake Geneva real estate again depends on what develops in Europe. If Greece cannot reach accord within its own parliament, and cannot enact the austerity measures as dictated by its aid package, mortgage rates should fall this week, too.
However, if Greece can reach agreement and move forward, it will appease investors worldwide and U.S. mortgage rates should resume rising. Likely by a lot.
Remember : The U.S. economy has shown slow, steady improvement of late and, normally, this would result in higher mortgage rates for consumers. That’s not what we’ve experienced, however. Instead, fears of a Greek debt default have dominated headlines.
As soon as markets are certain that Greece has a way forward, attention will return to the U.S. economy, and mortgage rates are expected to rise.
Therefore, float your mortgage rate with caution this week. Depending on global events, mortgage rates may rise or fall. Eliminate your interest rate risk. Lock your rate today.
Making A Lake Geneva Real Estate Mortgage Rate-Lock Plan Before Friday’s Jobs Report
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Tomorrow morning, at 8:30 AM ET, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for May. If you’re floating a Lake Geneva real estate mortgage rate right now — or are in the process of shopping for a loan — consider locking your rate sooner rather than later.
The Non-Farm Payrolls report can be a major market mover, causing large fluctuations in both conforming and FHA mortgage rates for Lake Geneva real estate. It’s because of the report’s insight into the U.S. economy.
More commonly called “the jobs report,” Non-Farm Payrolls is issued monthly. Sector-by-sector, it details the U.S. workforce and unemployment rates.
Jobs momentum has been strong. Through 7 consecutive months, the economy has added jobs, the government reports. Nearly 1 million new jobs have been created during that time. These are strong figures for a country that lost 7 million jobs in 2008 and 2009 combined.
However, Wednesday, a weaker-than-expected “preview” figure from payroll company ADP has Wall Street wondering whether this month is the month that the winning streak ends.
May’s ADP data fell so far short of expectations that investors have had to re-assess their job growth predictions. Earlier this week, the consensus was that 185,000 new jobs were created in May. Today, those estimates are much lower.
The change is leading Lake Geneva real estate mortgage rates lower, too.
The connection between jobs and mortgage rates is somewhat straight-forward. Job growth influences mortgage rates because jobs matter to the economy. As job growth slows, so does the economic growth, and that puts downward pressure on mortgage rates.
The opposite is true, too. Strong job growth tends to lead mortgage rates higher.
So, with job growth estimates revising lower, Wall Street has adjusted its “bets” and that’s benefiting rate shoppers across Wisconsin. Should the actual jobs figures not be so bad, though, expect a quick and sharp reversal; and much higher mortgage rates for everyone.
The safe move is to lock your rate today.
August 2010 Jobs Report Pushes Lake Geneva Mortgage Rates Higher
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Lake Geneva Real Estate
On the first Friday of each month, the Bureau of Labor Statistics releases Non-Farm Payrolls data for the month prior.
The data is more commonly called “the jobs report” and it’s a major factor in setting mortgage rates for Lake Geneva real estate and homeowners everywhere. Especially today, considering the economy.
This is because, although it’s believed that the recession of 2009 is over, there’s emerging talk of new recession starting.
Support for the argument is mixed:
Job growth has been slow, but planned layoffs touch a 10-year low
Consumer confidence is down, but beating expectations
Consumer spending is weak, but not declining
In other words, the economy could go in either direction in the latter half of 2010 and the jobs market may be the key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a “big ticket” items such as a home.
Jobs growth can provide tremendous support for housing, too.
Today, though, jobs growth was “fair.” According to the government, 54,000 jobs were lost in August, but that reflects the departure of 114,000 Census workers. The private sector (i.e. non-government jobs), by contrast, added 67,000.
In addition, net new jobs was revised higher for June and July by a total of 123,000. That’s a good-sized number, too.
Right now, Wall Street is reacting with enthusiasm, bidding up stocks at the expense of bonds — including mortgage-backed bonds. This is causing Lake Geneva mortgage rates to rise. Rates should be higher by about 1/8 percent this morning.
Lake Geneva mortgage rates have been falling since April but that momentum could reverse tomorrow.
The Bureau of Labor Statistics releases the July jobs report at 8:30 A.M. ET Friday. With a stronger-than-expected reading, mortgage rates should rise, harming home affordability for Lake Geneva real estate. Jobs are a keystone in economic growth and growth is tied to rates.
Earlier this year, job growth went positive and reached as far north as 431,000 jobs created in May. That figure slipped negative last month, however, as the temporary, decennial census workers left the workforce.
Jobs matter to the U.S. economy. Among other concerns, unemployed Americans spend less on everyday goods and services, and are more likely to stop payments on a mortgage. These effects retard the economy, spur foreclosures, and harm home values.
The reverse is also true. More workers means more disposable dollars and, in theory, a stronger economy.
Analysts expect that a net 65,000 jobs were lost in July. Wall Street — and Main Street — have a big interest in those results.
Poor jobs data would likely result in a stock market sell-off which would, in turn, boost the value of government-backed mortgage bonds. This is because bonds tend to perform well when the economy is sagging and higher bond prices mean lower Lake Geneva mortgage rates.
Strong jobs data, however, would likely push stock markets up and bond markets down. This would cause mortgage rates to rise. The stronger the employment figures, the higher Lake Geneva mortgage rates should go.
So, if you’re happy with where mortgage rates are today and you’re concerned about what the jobs report may do to them tomorrow, consider talking to me about locking your rate as soon as possible.
Once the jobs report is released, it may be too late.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls data from the month prior.
The release is more commonly called “the jobs report” — a major factor in Lake Geneva mortgage rates and monthly payments.
Especially now.
With the recession officially over and growth returning to the U.S. economy, the recovery’s next frontier is jobs. As job growth increases, home affordability should take a hit. Here’s why:
- As the number of working Americans increases, so should total consumer spending
- As consumer spending increases, so should a return to risk-taking on Wall Street
- As risk-taking returns to Wall Street, bond markets should start to lose
Lake Geneva mortgage rates, therefore, should rise.
Furthermore, as the jobs market stabilizes and recovers, renters should be more apt to buy their first home, and homeowners should be apt to up-size. More home buyers for Lake Geneva real estate means more competition for homes and higher home prices typically follow.
Job growth can be trickle-up for housing.
Today, however, the jobs data was not so strong. According to the government, 431,000 jobs were created in May, but of those new jobs, 95.4% represented temporary staffing for the 2010 Census. The number of private-sector jobs created fell well short of expectations and Wall Street is voting with its dollars right now. Mortgage bonds are gaining so, therefore, rates are falling.
The May 2010 jobs report may not reflect well on the economy, but home affordability for Lake Geneva real estate and around the country is improving because of it.