Posts Tagged ‘Non-Farm Payrolls’

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Homes Get More Affordable On March Jobs Data

Tuesday, April 10th, 2012

Unemployment Rate

Amer­i­cans con­tinue to get back to work.

Last Fri­day, in its Non-Farm Pay­rolls report for the month of March, the Bureau of Labor Sta­tis­tics announced 120,000 net new jobs created, plus com­bined revi­sions in the Jan­u­ary and Feb­ru­ary reports of +4,000 jobs.

The March report marks the 18th straight month of job growth nation­wide — the first time that’s hap­pened in 5 years.

The Unem­ploy­ment Rate dipped in March, too, falling one-tenth of one per­cent to 8.2%. This is its low­est national Unem­ploy­ment Rate since Feb­ru­ary 2009.

Clearly, the jobs mar­ket is mov­ing in the right direction. Yet, after the Non-Farm Pay­rolls report was released Fri­day morn­ing, stock mar­kets dropped and bond mar­kets gained — the oppo­site of what a casual mar­ket observer would expect.

It hap­pened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The mar­ket expected 200,000 jobs cre­ated in March at least and the actual reported fig­ure fell short.

Lucky for you, Wall Street’s pain is Main Street’s gain. After the jobs report was released, mort­gage rates imme­di­ately dropped to a 3-week low, mak­ing homes more afford­able through­out all 50 states.

The market’s reac­tion is an excel­lent exam­ple of how impor­tant jobs data can be to home afford­abil­ity — espe­cially in a recov­er­ing economy.

The econ­omy shed 7 mil­lion jobs between 2008–2009 and has since added more than half of them back. Wall Street pays close atten­tion to job cre­ation because more work­ing Amer­i­cans means more con­sumer spend­ing, and more con­sumer spend­ing means more eco­nomic growth.

Rate shop­pers caught a bit of a break on the March pay­roll data. By all accounts, the labor mar­ket recov­ery in under­way and, as it improves, higher mort­gage rates are likely nation­wide. For now, though, there’s a win­dow for low mort­gage rates that buy­ers and would-be refi­nanc­ing house­holds can try to exploit.

If you’re actively shop­ping for a home or a mort­gage, today’s mort­gage rates may be at “last chance”-like lev­els. Once rates rise, they’re expected to rise for good.

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Jobs Report Due Friday; Mortgage Rates Expected To Change

Thursday, April 5th, 2012

Non-Farm Payrolls estimateIf you’re out shop­ping for a home this week, or try­ing to lock a mort­gage rate, with Fri­day comes home afford­abil­ity risk. Con­sider lock­ing your mort­gage rate today.

The March Non-Farm Pay­rolls report is due for release Fri­day morn­ing and mort­gage rates are expected to move. Unfortunately for the home buy­ers and rate shop­pers , we can’t know in which direc­tion that will be.

The pru­dent play may be to lock your mort­gage rate today.

On the first Fri­day of each month, the Bureau of Labor Sta­tis­tics releases its Non-Farm Pay­rolls report. More com­monly called “the jobs report”, the release is a bona fide market-mover, month after month. 

Depend­ing on how the March jobs data reads, FHA and con­form­ing mort­gage rates could rise — or fall — by a mea­sur­able amount post-release. This is because today’s mort­gage mar­ket is closely tied to the econ­omy, and the econ­omy is closely tied to job growth.

The con­nec­tion between jobs and mort­gage rates is basic.

More work­ers leads to higher lev­els of con­sumer spend­ing nation­wide and con­sumer spend­ing accounts for the major­ity of the U.S. economy.

In addi­tion, when more work­ers are paid, more taxes are paid, too. Local, state and fed­eral gov­ern­ments col­lect more monies when pay­rolls are ris­ing which, in turn, ben­e­fits projects that pur­chase new goods and ser­vices, and, in many cases, results in the hir­ing of addi­tional personnel.

Job cre­ation can be a pow­er­ful, self-reinforcing cycle. 

Between 2008 and 2009, the econ­omy shed 7 mil­lion jobs. It has since recov­ered half of them. Fri­day, ana­lysts expect to count another 200,000 jobs cre­ated. If the actual num­ber of jobs cre­ated exceeds esti­mates, look for stock mar­kets to gain and bond mar­kets to lose. This leads to higher mort­gage rates — espe­cially with the Fed­eral Reserve zeroed in on the labor market.

If the actual num­ber of jobs cre­ated in March falls short of expec­ta­tions, how­ever, mort­gage rates may fall.

Unfor­tu­nately, by the time the report is released, it will be too late to act on it. The release is made at 8:30 AM ET and bond mar­kets are closed for Good Friday.

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What’s Ahead For Mortgage Rates This Week : April 2, 2012

Monday, April 2nd, 2012

Jobs growth can influence mortgage ratesMort­gage mar­kets improved last week on renewed con­cerns of a Euro­pean debt default, and Fed­eral Reserve rhetoric.

Con­form­ing mort­gage rates dropped on the news, one week after post­ing a 5-month high.

A major strike in Spain and grow­ing unrest in Italy, both in oppo­si­tion to recent aus­ter­ity mea­sures, have re-ignited fears that the Euro­zone may lapse into recession.

These are sim­i­lar begin­nings as with last year’s events in Greece. The dif­fer­ence is that Spain and Italy rep­re­sent a larger share of the Eurozone’s over­all econ­omy, and a debt default could trig­ger faster contagion.

Mort­gage mar­kets gained on the news in a bid of safe haven buying.

Bonds also gained as Fed­eral Reserve Chair­man Ben Bernanke clar­i­fied his posi­tion on the econ­omy with respect to Fed-led stim­u­lus. Sum­ma­rized, he said that the Fed­eral Reserve is inclined to keep its accom­moda­tive poli­cies in place until the labor mar­ket is more fully recovered.

In addi­tion, Chair­man Bernanke alluded to mak­ing direct mort­gage mar­ket inter­ven­tion if U.S. eco­nomic growth were to stall in the near future.

The news helped push mort­gage rates back below 4.000 per­cent last week, accord­ing to Fred­die Mac’s weekly Pri­mary Mort­gage Mar­ket Sur­vey. The aver­age 30-year fixed rate mort­gage rate fell to 3.99% for appli­cants will­ing to pay an accom­pa­ny­ing 0.7 dis­count plus clos­ing costs.

1 dis­count point is equal to one per­cent of your loan size.

This week’s mort­gage mar­ket activ­ity will be holiday-shortened so expect volatil­ity — espe­cially sur­round­ing Friday’s March Non-Farm Pay­rolls report.

More com­monly called “the jobs report”, Non-Farm Pay­rolls details national employ­ment rates and gains or losses in the work­force size. Lately, what’s been good for jobs has been good for the econ­omy so if the actual num­ber of jobs cre­ated exceeds the 200,000 pro­jected by econ­o­mists, or if the Unem­ploy­ment Rate drops off its cur­rent 8.3% read­ing, look for mort­gage rates to rise.

In gen­eral, eco­nomic expan­sion is bad for mort­gage rates through­out the nation.

Other market-moving news this week includes Tuesday’s FOMC Min­utes release and Thurs­day Job­less Claims data.  

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