Weekly Market Update
Last Week in Review: The Jobs Report for January was a "big" surprise, while home price appreciation continues to stabilize at normal levels.
Forecast for the Week: Economic data doesn't begin until Thursday, with just a handful of reports to end the week.
Last Week in Review
"Yet, through all the gloom, I can see the rays of ravishing light and glory." John Adams.
The gloom of recent years seems to be gone from the labor sector, as it is a bright spot in our economy at the start of this year.
The January Jobs Report showed that 257,000 jobs were created, above the 235,000 expected, as the sector continues to produce robust gains. In addition, job creations for November and December were revised sharply higher by 147,000. The last three months have averaged 336,000 new hires, the best three-month period in the last 17 years. January marked the 11th straight month of job gains above 200,000, the longest streak since 1994.
Also of note, the Unemployment Rate ticked up slightly to 5.7 percent from 5.6 percent, while hourly earnings came in above expectations. It will be important to monitor future hourly earnings readings, as growth in this area could cause an increase in inflation. Since inflation is the kryptonite for fixed investments like Mortgage Bonds, it can also be bad news for home loan rates (which are tied to Mortgage Bonds).
Over in housing, research firm CoreLogic reported that home prices, including distressed sales, rose by 5 percent from December 2013 to December 2014. Home price gains continue to stabilize at more normal levels from the double digit gains seen in the past few years. While the 5 percent gain is the 34th month of consecutive year-over-year increases in home prices nationally, prices are still 13.4 percent below their April 2006 peak.
The bottom line is that now is a great time to consider a home purchase or refinance. Rates still remain at historic lows! Let me know if I can answer any questions at all for you or your clients. I can be reached at email@example.com or on my cell phone at 908-202-7293.
Forecast for the Week
The economic calendar is quiet this week, but news from overseas could still cause volatility.
- On Thursday, look for Weekly Initial Jobless Claims and Retail Sales.
- Friday brings the Consumer Sentiment Index for February.
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: firstname.lastname@example.org