Jun 11, 2013 | Financial Reports
The U.S. Department of Labor released its Non-Farm Payrolls and National Unemployment Rate reports Friday showing 175,000 jobs were added in May, which surpassed expectations of 164,000 new jobs and April’s reading of 149,000 jobs added. The jobs added in May were largely from the private sector.
However, the national unemployment rate for May was 7.60 percent, one-tenth of a percent higher than expectations and the April reading of 7.50 percent. The rise was attributed to more people entering the workforce as opposed to people losing jobs.
420,000 workers joined the workforce in May, which pushed the civilian participation rate in the labor market to 63.4 percent; the highest participation rate since October 2012. A rising participation rate suggests that more workers believe they can find jobs and have joined or returned to the labor market.
Economists Pleased With Increasing Jobs In Difficult Environment
Economists were pleased to see jobs increasing against an environment of higher taxes, a soft global economy and budget cutbacks in the U.S. government.
A lingering issue for U.S. labor markets is the number of people looking for full time work, but who are unable to find full-time employment. When these workers are added to the ranks of the unemployed who are actively seeking work, the actual unemployment rate almost doubles to 13.8 percent for May.
The national unemployment rate is based on workers who are actively seeking work. Many U.S. workers stopped looking for work after years of unemployment.
Fed May Review Quantitative Easing Program Soon
These reports don’t provide a clear indication of what the Federal Reserve may do regarding its current monetary policy; the Fed is currently purchasing $85 billion a month in U.S. Treasury bonds and mortgage-backed securities (MBS). This effort is intended to keep long-term interest rates, including mortgage rates, lower.
The Fed has indicated that it will review its quantitative easing (QE) policy relative to improvements in the economy. In recent months, the Federal Open Market Committee of the Federal Reserve (FOMC) has discussed lowering or eliminating its QE efforts, but so far is maintaining its current level of QE and maintaining the federal funds rate at 0.250 percent.
While housing markets are improving, the jobs sector is moving at a slower pace. This suggests that home prices could rise even faster if more consumers had sufficient income for buying a home.
Jun 10, 2013 | Housing Analysis
Last week’s economic reports provided a mixed bag of results. On Monday, the Department of Commerce reported that construction spending increased by 0.40 percent in April and fell shy of the expected reading of 1.0 percent, but exceeded the March reading of -0.80 percent.
Home Prices Increase Fastest Since 2006
On Tuesday, CoreLogic released its Home Prices reported that the national average home price had increased by 12.10 percent year-over-year in April. The comparable year-over-year reading for April 2012 was 11.00 percent. This represents the fastest pace of home price increases since 2006.
The national average home price expanded by 3.20 percent as compared to March, but average prices grew faster in the West, which is experiencing a pronounced lack of available homes and developed land for building.
New Jobs Created Showing Improvement Over April Revisions
ADP released its private-sector Payrolls Report for May on Wednesday; 135,000 new private sector jobs were added as compared to investor expectations of 170,000 jobs added in May. The May reading surpassed April’s downwardly-revised reading of private-sector jobs added.
Friday’s Jobs Report, issued by the Bureau of Labor Statistics, consists of the Non-Farm Payrolls Report and the National Unemployment Rate. Non-Farm Payrolls added 175,000 public and private sector jobs and surpassed both the consensus reading of 164,000 new jobs and the prior week’s reading of 149,000 jobs added. The National Unemployment Rate ticked up from 7.50 to 7.60 percent. The Department of Labor attributes this increase to more people joining or returning to the labor market.
Investors Watching Fed Mortgage Backed Security Buying Activity Closely
The Federal Reserve Beige Book Report was also released Wednesday. It contained no surprises and noted modest to moderate economic growth in 11 of 12 Federal Reserve Districts. The Dallas Federal Reserve District reported strong growth, but investors will be watching next week’s Federal Open Market Committee (FOMC) meeting closely for proposed changes to the Fed’s current policy of buying bonds and mortgage backed securities (MBS) with the goal of keeping long term interest rates lower.
Thursday’s Primary Mortgage Market Survey brought disquieting news of rising mortgage rates. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage had risen from the prior week’s rate of 3.81 percent to 3.91 percent. Discount points fell slightly from 0.80 percent to 0.70 percent with buyers paying all of their closing costs. The average rate for a 15-year fixed rate mortgage rose from last week’s average rate of 2.98 percent to 3.03 percent with discount rates remaining the same at 0.70 percent for buyers paying all of their closing costs.
What‘s Ahead for Next Week
There is no news scheduled for release on Monday. The rest of the week’s calendar includes the NFIB Small Business Index on Tuesday and the Federal Budget for May on Wednesday. Thursday’s scheduled releases include Weekly Jobless Claims, Average weekly mortgage rates as reported by Freddie Mac, and Retail Sales for May. Friday’s schedule includes the Producer’s Price Index for May and June’s Consumer Sentiment Report.
Jun 7, 2013 | Around The Home
Imagine walking into your home and turning off the alarm, locking your doors, opening the windows and starting your coffee maker, all with a few taps of your finger on your smart phone?
What if you had a home security camera that you could monitor from anywhere and a motion sensor that would send you an email when your kids come home from school? What if you could open your blinds or unlock your home for a visitor, even from halfway around the world?
The technology that powers our home security systems is getting more and more sophisticated and in the future, our homes will be more responsive than we could ever imagine.
Rather than a simple line of defense that keeps out burglars, it will be a completely integrated and custom designed automated system that responds intelligently to your needs.
Here are a few of the upcoming technology innovations:
Smart Home Technology
At the moment, prototypes are being developed for integrated home security systems that have individual Internet protocols that can address everything from a fridge to a window to a door. Even your home appliances, like your refrigerator, air conditioning systems and lighting systems may be able to be managed remotely through a smart phone.
This connectivity essentially gives everything in your house an Internet address, so that you can control them and monitor them digitally. Once the system is linked up it can be controlled remotely by Blackberry, Apple or Android.
The 2013 Consumer Electronics Show in Las Vegas this year showcased a number of smart phone apps and devices designed to control everything within your home so that you can master the household with the click of a button.
The Future Is Still On Its Way
Although the technology is being rapidly developed, there is still a long way to go until we all live in automated houses like on The Jetsons. One underlying and yet unsolved issue is the security systems inability to function in a power outage or with bandwidth and connectivity challenges.
There are also many different conflicting operating systems, setups, standards and approaches that will need to be worked out before the dream of a fully automated Massachusetts home can become a reality.
Even so, the technological advances being made in home security and management systems are impressive and exciting to learn more about.
Jun 6, 2013 | Selling Real Estate
If you represent a seller in the sale of real estate and that sale is to be subject to the seller purchasing another property, be certain the terms of that contingency are detailed, clear and are included in the offer to purchase.
We often see language to the effect that the seller’s obligation to perform is “subject to successfully contracting to purchase another property.” That is all well and good, but it does not fully protect the seller. Once the seller contracts to purchase another property that contingency is extinguished and the seller can be obligated to perform under the contract. We all know that contracting to purchase a property and actually CLOSING on the property are often two different events.
To properly protect a seller their performance should be subject to actually CLOSING on the purchase of another property by a certain date. If you have a seller that has questions or concerns about a home sale contingency please have them contact me. Or if you have questions about the specific and prudent language to use give me a call.
Jun 5, 2013 | Mortgage Tips
When you are looking for a mortgage for your home, your credit score is very important. Any potential lender will check your score and will use the number to assess your creditworthiness and the interest rate that they offer you.
The better your credit score the lower the mortgage interest rates will be available to you, as the lender will be able to see that you can handle credit well.
However, if you have a very bad credit score, it could be causing you to be offered high interest rates on your mortgage that could cost you thousands over the years.
Improving your credit score before searching for a mortgage will ensure that you get the best rate possible. But what can you do to improve your credit score?
Here are three tips that can help you improve your credit score and your mortgage loan:
Be Patient
Remember that improving your bad credit will be a little bit like losing weight. You might not see results right away but it is the long term benefit of your good habits that will make all the difference.
When it comes to all of the ways to improve your credit score, there are no quick-fixes and the best way to rebuild your credit is to be responsible over time.
Check Your Credit Report For Errors
If you don’t know precisely what your credit score currently is, the first step will be for you to obtain a credit report. You can request a free copy of your credit report and check it over carefully for errors. There might be an error on the report that is making your score appear worse than it should be.
Set Up Payment Reminders
If you have trouble remembering to make your credit payments by the due date, this can be one of the biggest negative factors bringing down your score. You can ask your bank to set up convenient reminders through the online banking portals so that you will receive an email or a text whenever your payments are due.
Your credit score is very important when looking for a Worcester County area home mortgage, as it will mean that you receive much better program options and interest rates. Keep these tips in mind so that you can enjoy the best rates possible on your mortgage.
For more tips on how to improve your prospects for the best mortgage, feel free to contact your local, trusted mortgage professional.
