February's Jobs Report Could Be a Major Market Mover
In this Issue:
Last Week in Review: Recent housing reports have disappointed, but sales of new and existing homes are up from this time a year ago.
Forecast for the Week: The Jobs Report for February is a must-watch. Also look for news on inflation, personal income and spending, and manufacturing.
Last Week in Review
They say that March comes in like a lion, but recent housing reports have sounded more like a whimper than a roar.
Existing Home Sales slipped in January, coming in below expectations. The annual rate of 4.82 million units was the lowest level since last April as tight inventories, seasonal weather and the ongoing rise in prices kept buyers out of the market. Despite the decline, sales are up by 3.2 percent from a year ago. And while New Home Sales in January were flat, the overall pace of sales hovers near a six-year high as the economy and job market continue to improve. Sales of new homes are up a solid 5.3 percent from a year ago.
Also of note, home prices around the nation rose by 4.5 percent from December 2013 to December 2014, as home price appreciation values are now near more normal sustainable levels. From November to December, prices rose by 0.9 percent, the largest advance since March.
The second reading of Gross Domestic Product for the fourth quarter of 2014 fell to 2.2 percent from the 2.6 percent recorded in the first reading. For all of 2014, GDP grew by just 2.4 percent, compared to 2.2 percent in 2013 and 2.3 percent in 2012. These numbers aren't ones to write home about, as an annual rate of 3.5 percent is considered strong. GDP is the broadest measure of economic activity, and it will be important to see if 2015 can achieve higher growth.
The bottom line is that home loan rates remain attractive, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. I can be reached at email@example.com.
Forecast for the Week
Friday's Jobs Report for February could be a major market mover. Plus, there's important news on inflation, personal income and spending, and manufacturing.
- Right out of the gate on Monday, look for Personal Income, Personal Spending and Personal Consumption Expenditures (the Fed's favorite measure of inflation).
- Also on Monday, there will be manufacturing news via the ISM Index. The ISM Services Index follows on Wednesday.
- Wednesday also brings the ADP Employment Report, the prelude to the government's Jobs Report.
- On Thursday, Weekly Initial Jobless Claims will be released, as usual. Also look for Productivity for the fourth quarter of 2014.
- Friday is the big day with the February Jobs Report, which includes Non-farm Payrolls, Hourly Earnings and the Unemployment Rate.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: Michael.Borodinsky@caliberhomeloans.com