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Brought to you by:
Jonathan Bowen
Branch Manager
Office: 800-394-5252
Cell: 401-829-1929
jbowen@envoymtg.com
89 Mussey Road
Scarborough, ME 04074
www.envoymortgagemaine.com
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Jobs data points the way to stronger housing:
Real
Estate used to be about location, location, location. Now it is
most certainly about jobs, jobs, jobs.
We received some welcome news on the jobs front last week:
The private sector added a seasonally adjusted 325,000 jobs during the
month, up from 204,000 in November, payroll-processing firm ADP said:
It marked the
biggest monthly gain since December 2010, and was stronger than
expected. Economists surveyed by Briefing.com were forecasting a gain
of 180,000 jobs for the month. And the great news is that half of
the gains were made by small business (companies with fewer than 50
employees).
Headline National Unemployment Rate Drops to 8.5%:
The
U.S. Unemployment Rate unexpectedly fell to 8.5 percent last month as
job creation was more robust than expected, providing continued signs
that the nation's labor market is improving gradually.
Growth
in manufacturing jobs helped offset a loss in government positions,
while wages edged higher and the length of the work week also
lengthened a bit. Job gains came from a variety of quarters:
Transportation and warehousing surged by 50,000, the couriers and
message industry rose 42,000, and retail added 28,000. Manufacturing
grew by 23,000 and the hospitality industry continued its brisk pace,
adding 24,000 jobs in December and 230,000 over the past year at food
and drinking establishments.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +37 basis points from last
Friday to the prior Friday which moved mortgage rates lower.
Once again, we had much better than expected U.S. economic data with
ISM Services, Total Vehicle Sales, ADP Payrolls, Non-Farm payrolls and
Unemployment data.
Normally, these type of strong readings would cause bonds to sell off
and your mortgage rates to rise. But once again it was the
"fear factor" that kept traders buying bonds regardless of
the strong U.S. economic data. Traders simply wanted a safe place
to put their funds due to continued concerns over Europe and Iran's
threat to close down a major oil route.
What to Watch Out For This Week:
The following are the major
economic reports that will hit the market this week. They each
have the ability to affect the pricing of Mortgage Backed Securities
and therefore, interest rates for Government and Conventional
mortgages. I will be watching these reports closely for you and
let you know if there are any big surprises:
|
Date
|
Time
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Economic
Release
|
Actual
|
Cons.
|
Previous
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9-Jan
|
15:00
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Consumer
Credit Change
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|
$7.30B
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$7.65B
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10-Jan
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10:00
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IBD/TIPP
Economic Optimism (MoM)
|
|
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42.8
|
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10-Jan
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10:00
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Wholesale
Inventories
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|
0.50%
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1.60%
|
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11-Jan
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7:00
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MBA Mortgage
Applications
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|
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-4.10%
|
|
11-Jan
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10:30
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EIA Crude
Oil Stocks change
|
|
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2.209M
|
|
11-Jan
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14:00
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Fed's Beige
Book
|
|
|
|
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12-Jan
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8:30
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Continuing
Jobless Claims
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|
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3.595M
|
|
12-Jan
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8:30
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Initial
Jobless Claims
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|
375K
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372K
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12-Jan
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8:30
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Retail Sales
(MoM)
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|
0.20%
|
0.20%
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|
12-Jan
|
8:30
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Retail Sales
ex Autos (MoM)
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0.30%
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0.20%
|
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12-Jan
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10:00
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Business
Inventories
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0.40%
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0.80%
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12-Jan
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14:00
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Monthly
Budget Statement
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-79.0B
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-137.3B
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13-Jan
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8:30
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Import Price
Index (YoY)
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-0.10%
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9.90%
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13-Jan
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8:30
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Trade
Balance
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($44.60)
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-$43.47B
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13-Jan
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9:55
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Reuters/Michigan
Consumer Sentiment Index
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70.5
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69.9
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It
is virtually impossible for you to keep track of what is going on with
the economy and other events that can impact the housing and mortgage
markets. Just leave it to me, I monitor the live trading of
Mortgage Backed Securities which are the only thing government and
conventional mortgage rates are based upon.
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