Last Week in Review: The Jobs Report for March was a disappointment which is good news for mortgage rates, while home values continue to grow at normal levels. The combination of low rates and rising home values is a perfect scenario to support home purchases.
Forecast for the Week: The economic calendar is quiet, but the minutes from the Fed's March meeting and the beginning of earnings season could cause volatility.
Last Week in Review
"If you want the flowers in your garden to be glorious and to smell good, you must risk an occasional stink." Lord Harewood. The Jobs Report for March was a stinker, but hopefully not a sign of more bad reports to come from the labor sector.
Employers added 126,000 new jobs in March, well below the 250,000 expected. This was the slowest pace of job creations since December 2013, and it ended 12 straight months of job gains above 200,000. The lower-than-expected number could be partly due to the now-ended port strike on the West Coast, along with harsh winter weather.
The number of job gains for January and February were also revised lower by 69,000, which added to the sour tone of the report. However, the Unemployment Rate did remain steady at 5.5 percent. It will be important to see if the March report was just an anomaly, or a sign of more struggles ahead for the labor sector.
In housing news, the S&P/Case-Shiller Home Price Index rose by 4.6 percent from January 2014 to January 2015. This is the biggest gain since September and up from the 4.4 percent annual rate recorded in December. The lofty price gains seen in 2013 and early 2014 may have cooled, but home price gains continue to be steady at what is considered normal levels. Also, February Pending Home Sales came in better than expected, up 3.1 percent from January and up 12 percent from this time last year.
The bottom line is that home loan rates remain near historic lows, and now is the perfect 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 firstname.lastname@example.org.
Forecast for the Week
After last week's heavy-hitters, this week's calendar features just a few economic reports.
- On Monday, look for the ISM Services Index, which is a national non-manufacturing index.
- Wednesday brings the minutes from the March meeting of the Federal Open Market Committee.
- Weekly Initial Jobless Claims will be reported, as usual, on Thursday.
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 today’s Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse. Today’s data supports continued lower rates!
Economic Calendar for the Week of April 06 - April 10