Oct 6, 2011 | The Economy
Mortgage rates are prepped to make big moves in the next 36 hours. Is it time for you to call in your rate lock?
Friday, at 8:30 AM ET, the Bureau of Labor Statistics will release the Non-Farm Payrolls report for September. Issued monthly, the “jobs report” offers sector-by-sector job creation figures from the month prior, and reports on the national Unemployment Rate.
Last month, exactly zero net new jobs were created, the government said. This month, economists expect a net 60,000 new jobs created.
Depending on where the actual monthly figure falls, FHA and conforming mortgage rates in Leominster may be volatile. The jobs reports tends to have out-sized influence on the mortgage bond market.
The connection between the jobs market and the mortgage market is fairly straight-forward. As jobs go, so goes the economy. This is because more working Americans leads to a stronger economic base.
- When more people work, consumer spending grows
- When more people work, governments collect more taxes
- When more people work, household savings increases
Each of these items are strengths to a recovering economy.
For rate shoppers, Friday’s job report could cause mortgage rates to rise — or fall. If the actual number of jobs created exceeded the 60,000 consensus estimate, look for mortgage rates to climb.
Conversely, if new jobs fell short of 60,000, expect that rates will drop.
Home affordability is at all-time highs because mortgage rates are at all-time lows. If you’re under contract for a home or looking to refinance, eliminate some of your interest rate risk. Lock ahead of Friday’s Non-Farm Payrolls release.
Get your rate lock in today.
Sep 9, 2011 | Buying Real Estate, Housing Analysis, Interesting Stuff, Selling Real Estate, The Economy
Home affordability slipped slightly last quarter, dragged down by rising mortgage rates and recovering home prices in Massachusetts and nationwide.
The National Association of Home Builders reports a Q2 2011 Home Opportunity Index reading of 72.6. This means that nearly 3 of 4 homes sold last quarter were affordable to households earning the national median income of $64,200.
Q2 2011 marks the 10th straight quarter — dating back to 2009 — in which the index surpassed 70.
Prior to 2009, the index had never crossed 70 even one time.
However, we must remember that the Home Affordability Index is a national survey. From region-to-region, and town-to-town, home affordability varied.
In the Midwest, for example, affordability was highest. 14 of the 15 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. Only Syracuse (#9) cracked the list from other regions.
The top 5 most affordable cities in Q2 2011 were: (more…)
Sep 7, 2011 | Buying Real Estate, Mortgage Lenders, Mortgage Rates, The Economy
The U.S. economy is no longer adding new jobs.
Last Friday, in its monthly Non-Farm Payrolls report, the Bureau of Labor Statistics reported that the U.S. economy added exactly zero new jobs in August as the national Unemployment Rate held steady at 9.1 percent.
Despite the “zero” reading, the jobs figures were in the red. This is because the BLS issued revisions to its June and July figures that adjusted the two months of data down by 58,000 jobs.
Economists had expected a monthly reading of +75,000. Their estimates missed.
The weaker-than-expected jobs data fueled a stock market sell-off that pushed stocks down 2.5% and spurred a bond market rally. (more…)
Sep 1, 2011 | Buying Real Estate, Interesting Stuff, Mortgage Rates, The Economy
If you’re shopping for a mortgage rate, today may be a good day to lock one down. That’s because Friday morning, the Bureau of Labor Statistics will release its Non-Farm Payrolls report for August 2011.
The “jobs report” tends to have a big influence on mortgage bonds and mortgage rates in Leominster.
The jobs report is a monthly issuance, providing sector-by-sector analysis of the U.S. workforce. It also report the national Unemployment Rate.
Wall Street expects the August Non-Farm Payrolls data to show 75,000 jobs created in August, down from 117,000 in July; and it expects that the Unemployment Rate will remain unchanged at 9.1%.
The jobs report’s connection to mortgage markets is straight-forward — as jobs go, so goes the economy. This is because when the number of working Americans rises :
- Consumer spending gets a boost
- Government tax collection gets a boost
- Household savings gets a boost
These are each good turns in a recovering economy. (more…)
Aug 11, 2011 | The Economy
More Americans are getting back to work.
The latest Non-Farm Payrolls survey from the Bureau of Labor Statistics shows that 117,000 net new jobs were created in July, thumping analyst estimates and surprising Wall Street investors.
In addition, May and June’s originally-reported figures were both revised higher:
- May 2011 was revised higher by 28,000 jobs
- June 2011 was revised higher by 28,000 jobs
The national Unemployment Rate slipped to 9.1 percent.
The jobs report’s strong readings would typically be a boon to stock market and a threat to mortgage rates. This is because more employed Americans means more disposable income spent on products and services; and more taxes paid to governments at the federal, state and local level.
This combination fuels consumer spending and supports new job growth, a self-reinforcing cycle that spurs economic growth and often to draw investors into equities.
This month, however, the market reaction has been decidedly different. (more…)
Aug 9, 2011 | Mortgage Rates, News, The Economy
Mortgage rates continue drifting downward, despite — or because of — a ratings downgrade on long-term U.S. government debt. Standard & Poors issued a single-notch downgrade after Friday’s market close, from AAA to AA+.
Of the roughly $9.4 billion in publicly-held U.S. debt, 72 percent is long-term (i.e. with duration of 2 years or longer).
U.S. short-term debt was not downgraded.
When an entity — government, business, or other — is cited for a credit downgrade, it means that the risk of lending money to that entity has increased. In theory, higher risk should lead to higher borrowing costs and higher consumer rates.
Except in today’s U.S. Treasury and mortgage bond markets, the opposite is occurring. U.S.-backed bonds are in demand, leading rates lower. It’s an unexpected response to the S&P downgrade. (more…)
