Thursday – June 3, 2021
First-time unemployment claims fell to the lowest level since the shutdowns began last year. Weekly Initial Jobless Claims decreased to 385,000 for the week ended May 29, 2021, from 405,000 in the previous week. To put it into perspective, the week of April 4, 2020 claims were over 6 million as the shutdowns took hold. Continuing claims, or those receiving benefits for at least two weeks straight, were at 3.771 million from 3.642 million. With all U.S. having reopened their economies, many unemployed Americans should be able to go back to work.
The service sector of the U.S. economy got a shot in the arm in May with big job gains. May ADP Private Payrolls surged by 978,000 with a much-needed gain of 850,000 in the service sector of the economy. Private payrolls have now recovered nearly 63% of their shutdown-era decline. It was a great number, but there is still a lot of Americans out of work. After tomorrow’s jobs report, the U.S. will still be around 7 million jobs short of where the nation was in February 2020.
Home borrowing costs inched higher this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose four basis points to 2.99% with 0.6 in points and fees. A year ago at this time, the rate was 3.18%. It is up from 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “Home prices continue to accelerate while inventory remains low and new home construction cannot happen fast enough.”
Courtesy of Mortgage Market Guide
-CHECK US OUT ON SOCIAL-
Wednesday – June 2, 2021
Home borrowing costs were essentially unchanged last week and remain at historically low levels. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage was at 3.17% with 0.39 in points for the week ending May 28, 2021. The Market Composite Index, a measure of total mortgage loan application volume, fell 4%, the Purchase Index declined by 3.1% while the Refinance Index declined by 4.6% and was 6% higher from a year ago. Spokesperson Joel Kan said, “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity.”
The housing market continues to heat up as low supply and high demand continues to push up home prices and the amount of homes that sold above listing prices. The report shows that a bit more than half of homes (51%) have sold above their listing price in the four week period ending May 23, 2021, up from 26% one year ago. Also, many other sales records were hit which include the median home sale price of $354,250 and the number of days on the market, 17, from 36 a year ago. Asking prices also reached an average of $361,875, another record high.
Courtesy of Mortgage Market Guide
-CHECK US OUT ON SOCIAL-
Tuesday – June 1, 2021
CoreLogic reports that home prices nationwide, including distressed sales, rose by 13% in April 2021 from April 2020 and were up monthly by 2.1% in April 2021 compared with March 2021. The rise in prices continues to run on the same theme … low inventories and high demand – Economics 101. Chief economist Dr. Frank Nothaft said, “Baby boomers are staying in their homes longer, slowing the pace with which existing homes come on the for-sale market. Owner occupants today have been in their homes for a median of 13 years, about 50% longer than the previous generation.” Looking ahead, prices are expected to rise 2.8% from April 2021 to April 2022.
Optimism surrounding the “Great Reopening” across the U.S. is taking place with most states now at almost full capacity for all types of venues. You can feel the energy and see the pent-up demand across the nation as COVID cases decline as the virus loses its grip. Consumer spending makes up 2/3s of our GDP as Americans look to spend big this summer. Estimates are now calling for 6%+ Gross Domestic Product growth in 2021.
It’s Jobs Week! Investors will have important jobs data from the ADP Private Payrolls and the Jobs Report on Thursday and Friday, respectively. Last month’s Jobs Report came in at 266,000 and well below estimates. Will there be revision and if the headline print highlights the “Great Reopening” of the economy? It is expected that May Non-Farm Payrolls rose by 720,000.
Courtesy of Mortgage Market Guide
-CHECK US OUT ON SOCIAL-