Posts Tagged ‘Non-Farm Payrolls’

« Older Entries

What’s Ahead For Mortgage Rates This Week : February 6, 2012

Monday, February 6th, 2012

Jobs growth pushes mortgage rates higherMort­gage mar­kets wors­ened last week as domes­tic job growth sur­prised Wall Street and the Euro­zone moved yet one more step closer to reach­ing a last­ing Greece sov­er­eign debt solution.

Con­form­ing mort­gage rates rose on the news, although you wouldn’t know it from look­ing at Fred­die Mac’s weekly mort­gage rate survey.

Accord­ing to Fred­die Mac, the aver­age 30-year fixed rate mort­gage rate fell to 3.87% last week with 0.8 dis­count points due at clos­ing, plus clos­ing costs. 1 dis­count point is a fee equal to one per­cent of your loan size.

3.87% for a 30-year fixed rate mort­gage is the offi­cial, all-time low for the weekly Fred­die Mac sur­vey, con­ducted since the 1970s. How­ever, because Fred­die Mac gath­ers its results on Mon­day and Tues­day only, by the time the sur­vey results were released Thurs­day morn­ing, mort­gage rates were already ris­ing off their lows.

Then, Fri­day morn­ing, after January’s Non-Farm Pay­rolls data was released, mort­gage rates surged.

The Jan­u­ary jobs report exceeded expec­ta­tions in nearly every fash­ion possible :

  • Econ­o­mists expected to see 135,000 jobs cre­ated in Jan­u­ary. The actual num­ber was 243,000.
  • Econ­o­mists expected to see the Unem­ploy­ment Rate at 8.5% in Jan­u­ary. The actual num­ber was 8.3%.
  • Revi­sions added an addi­tional 180,000 net new jobs to the orig­i­nal 2011 tally.

As com­pared to one year ago, there are 2.1 mil­lion more peo­ple employed in the U.S. work­force. Fig­ures like this hint at a stronger national econ­omy, and that tends to drive mort­gage rates up.

This week, with lit­tle eco­nomic data due for release, mort­gage rates are expected to move on momen­tum. Right now, that momen­tum is caus­ing rates to rise.

If you’re shop­ping for a mort­gage rate and want to know if the time is right to lock, con­sider that it’s impos­si­ble to time a mar­ket bot­tom, but sim­ple to spot a “good deal”.

Mort­gage rates remain near his­tor­i­cal lows — it’s a good time to lock one in. Call your lender today. 

Tags: , ,
Posted in Mortgage Rates | No Comments »

Home Affordability Threatened By Friday’s Jobs Report

Thursday, February 2nd, 2012

3-month rolling average NFP

This week, once more, we find mort­gage rates are on a down­ward tra­jec­tory. Con­form­ing mort­gage rates have returned to near all-time lows. After Fri­day morning’s Non-Farm Pay­rolls report, how­ever, those low rates may come to an end.

It’s a risky time for home buy­ers and would-be refi­nancers to be with­out a locked rate.

Each month, on the first Fri­day, the Bureau of Labor Sta­tis­tics releases its Non-Farm Pay­rolls report for the month prior. More com­monly called the “jobs report”, Non-Farm Pay­rolls pro­vides a sector-by-sector employ­ment break­down, and the nation’s Unem­ploy­ment Rate.

In Decem­ber 2011, the gov­ern­ment reported 200,000 net new jobs cre­ated, and an Unem­ploy­ment Rate of 8.5%.

For Jan­u­ary 2012, econ­o­mists project 135,000 net new jobs with no change in the Unem­ploy­ment Rate and, depend­ing on how accu­rate those pre­dic­tions are proved, FHA and con­form­ing mort­gage rates are sub­ject to change. The monthly jobs reports tends to have an out-sized influ­ence on the direc­tion of daily mort­gage rates.

The con­nec­tion between jobs and mort­gage rates is fairly direct.

Job growth is a key cog in the eco­nomic growth engine and mort­gage rates change daily based on short– and long-term eco­nomic expec­ta­tion. As more peo­ple join the work­force, eco­nomic expec­ta­tions change; the econ­omy tends to expand, breed­ing opti­mism among invest­ment. When this occurs, it often spurs invest­ment in the stock mar­ket, which tends to leads mort­gage rates up.

In short, in a recov­er­ing econ­omy, when job growth is strong, all things equal, mort­gage rates rise. Home afford­abil­ity suffers.

So, for today’s rate shop­pers, Friday’s job report rep­re­sents a risk. The econ­omy has added jobs over 15 straight months, a streak that’s added 2.1 mil­lion peo­ple to the work­force. Although the jobs mar­ket remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nation­wide, more money spent by house­holds, and more taxes col­lected by governments.

This items build a foun­da­tion for eco­nomic growth and Wall Street is watching.

If tomorrow’s Non-Farm Pay­rolls shows more jobs cre­ated than the esti­mated 135,000, mort­gage rates are expected to rise. If the jobs fig­ures falls short, mort­gage rates should fall.

The Non-Farm Pay­rolls report is released at 8:30 AM ET.

Tags: , ,
Posted in The Economy | No Comments »

What’s Ahead For Mortgage Rates This Week : January 30, 2012

Monday, January 30th, 2012

Net New Jobs, 2010-2011Mort­gage mar­kets improved last week as news from the Fed­eral Reserve, the U.S. econ­omy, and Europe com­bined to spur new demand for mortgage-backed bonds.

Con­form­ing mort­gage rates ral­lied from Wednes­day through Friday’s close, end­ing the week near all-time lows set ear­lier this year.

Last week’s rally was sparked by the Fed­eral Open Mar­ket Committee.

After its first meet­ing of the year, Chair­man Ben Bernanke & Co. changed its pro­jec­tion for “excep­tion­ally low rates” to at least late-2014. Pre­vi­ously, the Fed had said its bench­mark Fed Funds Rate would remain low until 2013.

This, in con­junc­tion with the Fed’s mes­sage that fur­ther eco­nomic stim­u­lus may be com­ing, led Wall Street investors to increase their bets on mort­gage bonds, push­ing up prices and push­ing down yields.

Lower yields means lower rates.

Mort­gage rates were also helped lower by mixed data on the U.S. econ­omy includ­ing weaker-than-expected hous­ing reports, and another set­back in the Greece sov­er­eign debt negotiations.

Each time that Euro­zone lead­ers have failed to reach an expected accord with Greece since 2010, mort­gage rates have dropped. Last week was no different.

This week, with a large amount of U.S. eco­nomic data due for release and a high-profile sum­mit among Euro­pean Union lead­ers, mort­gage rates are poised to move. Unfor­tu­nately, we can’t know in which direction.

Some of the news that will move mar­kets include :

  • Mon­day : Per­sonal Con­sump­tion Expenditures
  • Tues­day : Con­sumer Con­fi­dence; Case-Shiller Index
  • Wednes­day : Con­struc­tion Spending
  • Thurs­day : Weekly Job­less Claims
  • Fri­day : Non-Farm Payrolls;Factory Orders

Of all of the eco­nomic releases, Friday’s Non-Farm Pay­rolls has the most poten­tial to move mar­kets. More com­monly called “the jobs report”, Non-Farm Pay­rolls details the monthly change in national employ­ment and the national Unem­ploy­ment Rate. 

Jobs are believed to be the key to U.S. eco­nomic recov­ery so strength in jobs should result in higher mort­gage rates through­out and the country.

Mort­gage rates remain very low. If you’re ner­vous about mort­gage rates ris­ing this week or next, it’s as good of a time as any to lock your rate with a lender, and start mov­ing toward closing.

Tags: , ,
Posted in Mortgage Rates | No Comments »

« Older Entries