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Posts Tagged ‘Non-Farm Payrolls’

What’s Ahead For Mortgage Rates This Week : September 4, 2012

Posted by jleonetti on September 4th, 2012 No Comments

Jobs Report In FocusMortgage markets improved last week for the second consecutive week.

With no news coming from Europe, Wall Street was focused U.S. economic data and Federal Reserve Chairman Ben Bernanke’s planned public speech from the Fed’s annual retreat in Jackson Hole, Wyoming.

Rate shoppers and home buyers caught a break.

The housing market was shown to be improving last week, as was the average household income nationwide — two events which would have typically moved delaware  mortgage rates higher. But, because the Fed Chairman used his speech to signal that new economic stimulus may be imminent, mortgage rates dropped.

The Fed is expected to launch a bond-buying program that would create new demand for mortgage-backed bonds. Mortgage-backed bonds are the basis for most U.S. mortgage rates and the new-found demand would result in lower rates nationwide. 

According to Freddie Mac’s weekly mortgage rate survey, the 30-year fixed rate mortgage rate fell to 3.59% last week for borrowers willing to pay 0.6 discount points plus a full set of closing costs, where 0.6 discount points is a one-time closing cost equal to 0.6 percent of your loan size.

Conventional mortgage rates open this week at a 4-week best. Threats to low rates remain, however.

A European Central Bank meeting is scheduled for Thursday and the release of the August Non-Farm Payrolls report is due Friday. Both events could have negative repercussions on mortgage rates. 

For example, the ECB is expected to announce new aid measures for some its struggling member nations, including Greece, Spain and Italy. If the aid package “ends” the sovereign debt issues which have plagued the European Union since 2010, equity markets would rally on the news at the expense of bond markets. This would drive U.S. mortgage rates higher as investors dump their bond holdings.

Similarly, if the August jobs report is deemed “strong”, it would lower the likelihood of new Fed-led stimulus. This, too, would lead mortgage rates higher — perhaps by a lot.

Economists expect to see that 130,000 net new jobs created last month. The jobs report will be released Friday at 8:30 AM ET.

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Mortgage Rate Risk Ahead Of Friday Morning’s Jobs Report

Posted by jleonetti on July 5th, 2012 No Comments

Non-Farm Payrolls Since July 2010

Friday morning, the Bureau of Labor Statistics will release its Non-Farm Payrolls report. More commonly called “the jobs report”, Non-Farm Payrolls is a monthly market-mover.

Depending on the strength — or weakness — of the data, mortgage rates will change. Perhaps sharply. Unfortunately, we can’t know in which direction.

If you’re actively shopping for a mortgage , therefore, today may be a prudent day to lock a mortgage.

The job report’s connection to mortgage rates is straight-forward. As the number of U.S. citizens earning paychecks increases, reverberations are felt through the economy.

First, higher levels of income are tied to higher levels of consumer spending and consumer spending accounts for the majority of the U.S. economy. More working citizens, therefore, builds a larger overall economic base.

Next, as the overall economic base grows, businesses produce and sell more goods, necessitating the hiring of additional personnel and the purchase of more raw materials — both positives for the economy.

And, lastly, as more paychecks are written, more taxes are paid to local, state and federal governments. These taxes are often used to fund projects and purchase goods and services which, in turn, grow the economy as well.

Tying it all together, the health of the U.S. economy is a major factor is setting day-to-day mortgage rates across delaware. This is why rate shoppers face risk with tomorrow’s Non-Farm Payrolls report.

Between 2008 and 2009, the economy shed 7 million jobs. It has since recovered 3.9 million of them and, Friday, analysts expect to see another 100,000 jobs created in June. If the actual number of jobs created exceeds this estimate, look for mortgage rates to rise. 

If the actual number of jobs created falls short of 100,000, mortgage rates may fall.

The government releases Non-Farm Payrolls data at 8:30 AM ET Friday.

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U.S. Posts Its 20th Straight Month Of Job Growth

Posted by jleonetti on June 5th, 2012 No Comments

Non-Farm Payrolls 2010-2012For the second straight year, the jobs market looks to be slowing into the summer.

Last Friday, in its monthly Non-Farm Payrolls report for May 2012, the Bureau of Labor Statistics reported 69,000 net new jobs created, plus a one-tick rise in the national Unemployment Rate to 8.2%.

2012 is shaping up like 2011, it appears.

Last year, between May and August, the jobs market was decidedly worse as compared to the rest of the year, adding just 80,000 jobs on average per month as compared to 190,000 new jobs created on average during each of the other 8 months.

This year, a similar slowdown may be in store. 

Although the May jobs report marks the 20th consecutive month during which the U.S. economy added new jobs, the reported figure fell well short of analyst expectations, which called for 150,000 net new jobs last month.

In addition, it was found that the previously-reported tallies for new jobs created in March and April were overstated by a total of forty-seven thousand jobs. This lowered the overall net new jobs created last month to 22,000.

Mortgage rates are falling on the news.

Since the jobs report’s release, 30-year fixed rate mortgage rates have dropped below Freddie Mac’s reported 3.75% mortgage rate for borrowers willing to pay 0.7 discount points plus closing costs; and, the 15-year fixed rate mortgage has dropped farther below 3.00%.

The weaker-than-expected data has moved Wall Street investors away from stock markets in favor of the relative safety of bond markets, a market which includes the one for mortgage-backed bonds. When mortgage-backed bonds are in demand like this, it helps to push down mortgage rates nationwide.

That’s exactly what we’re seeing.

Mortgage rates are expected to make new lows this week, in part, because of U.S. employment weakness. Should this year’s jobs market rebound like in 2011, though, look for mortgage rates to climb back shortly.

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What’s Ahead For Mortgage Rates This Week : May 7, 2012

Posted by jleonetti on May 7th, 2012 No Comments

Unemployment RateAfter two weeks of no change, mortgage markets improved last week, pushing mortgage rates lower throughout delaware.

The majority of the improvements occurred Friday after the April jobs report failed to impress Wall Street, and after it became clear that the Eurozone’s struggles with sovereign debt would continue.

According to Freddie Mac, conforming 30-year fixed rate mortgage rates fell to 3.84% nationwide, on average, for borrowers willing to pay 0.8 discount points at closing plus a full set of closing costs. 

1 discount point is equal to 1 percent of your loan size such that one discount point on a $200,000 loan would require $2,000 to be paid at-closing.

Freddie Mac’s reported rates for the benchmark 30-year fixed rate mortgage are the lowest in recorded history.

The 15-year fixed rate mortgage is also at its lowest point in history. According to Freddie Mac’s survey, the 15-year fixed averaged 3.07% with 0.7 discount points last week. One year ago, the rate was 3.89%.

This week, with a data-sparse economic calendar, mortgage markets will likely take cues from events in Europe. Notably, France has elected a new leader, one that prefers growth over austerity; and voters in Greece have “punished” austerity-backing leaders, in the process creating a split parliament.

Each event adds uncertainty to an already unstable economic environment and uncertainty favors U.S. rate shoppers.

Doubt spurs investors to seek “safe” assets and U.S. government-backed bonds — including mortgage backed bonds — meet that criteria. As demand for mortgage bonds rise, mortgage rates tend to fall.

This week, rates are starting the week improved. Whether it’s a knee-jerk reaction to Eurozone news from the weekend, or low rates are here to stay is tough to know. Therefore, if today’s mortgage rates look good to you, consider locking something in. There’s more room for rates to rise than to fall.

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Make A Mortgage Rate Plan Ahead Of The Jobs Report

Posted by jleonetti on May 3rd, 2012 No Comments

Non-Farm Payrolls 2000-2012

Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move. 

It’s a risky time for delaware home buyers to be without a locked mortgage rate.

The action begins at 8:30 A.M. ET Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.

The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.

In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.

For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.

Based on the accuracy of those predictions, mortgage rates are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if the actual number of jobs created falls short, mortgage rates should drop.

Job growth’s link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street’s growth projections for the economy. When that happens — especially in a recovering economy such as this one – mortgage rates tend to rise.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability.

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

Posted by jleonetti on April 30th, 2012 No Comments

Fed Funds RateMortgage markets were mostly unchanged last week for the second straight week. Spain made few moves to allay concerns from its investors, the Federal Reserve did little to change its message on the U.S. economy, and newly-released economic data was in-line with expectations.

Conforming mortgage rates in pennsylavania idled last week, remaining near all-time lows for the 30-year fixed rate mortgage, the 15-year fixed rate mortgage; and the 5-year ARM.

According to Freddie Mac’s weekly mortgage rate survey, last week’s mortgage rates, as averaged from more than 125 banks nationwide, were as follows :

  • 30-year fixed rate mortgage : 3.88% with 0.7 discount points
  • 15-year fixed rate mortgage : 3.12% with 0.6 discount points
  • 5-year adjustable rate mortgage : 2.85% with 0.6 discount points

A discount point is a one-time closing cost and is equal to one percent of your overall loan size. This means that a mortgage applicant with a $100,000 mortgage and an accompanying 0.7 discount points would be responsible for paying an upfront charge of $700 at the time of closing.

Freddie Mac’s mortgage rates assume full closing costs, too.

This week, it’s unclear whether mortgage rates will rise or fall.

There are few economic data points due for release so mortgage markets are expected to take their cues from Europe where there’s no shortage of story lines.

In Spain, there are protests over new austerity measures. In France, a new President may be elected — one whom opposes austerity. In the Netherlands, a new budget passed that includes austerity measures, but barely.

Each storyline generates uncertainty about the future of Europe and its unified economy. As the uncertainty grows, global investors seek safety in the U.S. mrotgage bond market, a move that helps mortgage rate shoppers. When demand for mortgage bonds is high, mortgage rates tend to improve.

Also affecting mortgage rates this week will be Friday’s Non-Farm Payrolls report.

The economy is expected to have added 165,000 net new jobs in April and the Unemployment Rate is believed to have remained unchanged at 8.2%. If there is a deviation from either of these expectations, mortgage rates will change. If the actual jobs data is stronger than Wall Street expectations, mortgage rates are likely to rise.

If the jobs report is weak, mortgage rates should fall.

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Homes Get More Affordable On March Jobs Data

Posted by jleonetti on April 10th, 2012 No Comments

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 in delaware and 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

Posted by jleonetti on April 5th, 2012 No Comments

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

Posted by jleonetti on April 2nd, 2012 No Comments

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 in delaware 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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Mortgage Rates Expected To Rise On A Strong Job Report

Posted by jleonetti on March 8th, 2012 No Comments

Net New Jobs Feb 2010-Feb 2012With home affordability at an all-time high, buoyed by the lowest mortgage rates ever, it’s been a terrific time to buy or refinance a home using a mortgage.

The good times may not last, though, so today marks an ideal time to lock a mortgage rate. Friday brings risk. Here’s why.

Since 2010, weak economic conditions have been a primary catalyst for low mortgage rates in delaware. Over the last 12 months, though, manufacturing output has been rising, consumer spending has been climbing, and business investment has increasing.

In other words, the economy is improving. However, it’s the jobs market that’s believed to be the economic recovery keystone. When jobs come back, analysts say, so does the economy.

Assuming that’s true, a recovery may already be well underway.

According to the Bureau of Labor Statistics, the U.S. jobs market has grown for 16 straight months now, adding 2.5 million net new jobs along the way. It’s one reason why the February jobs report matters so much to housing. 

Rate shoppers would do well to pay attention.

Friday, at 8:30 AM ET, the government will release its Non-Farm Payrolls report for February. Wall Street expects the report to show 210,000 new jobs were created in February, a figure slightly higher than the rolling, 6-month average for job growth. This would be a positive economic indicator.

If the analysts are correct, mortgage rates are likely to rise on the news, harming home affordability.

Furthermore, affordability could be harmed by a lot if the number of net new jobs created exceeds the 210,000 tally expected. It’s not a far-fetched scenario. Wall Street’s “whispers” put the actual jobs figure somewhere between 250,000-300,000. A reading lije this would cause mortgage rates to spike and would add money to a prospective monthly mortgage payment.

If the idea of rising mortgage rates makes you nervous, consider taking your nerves out of the equation. Call your loan officer today. Lock your rate ahead of Friday’s Non-Farm Payrolls release.

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