Daily Rate Update: May 30th-June 3rd

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Thursday – June 2, 2022

Private payroll growth was sluggish in May, the slowest gain in two years. ADP Private Payrolls rose 128,000 in May versus the 300,000 expected and down from 202,000 in April which was revised from 247,000. Small businesses took the brunt of the slowdown as companies employing fewer than 50 workers reduced payrolls by 91,000. “Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” said Nela Richardson, chief economist, ADP. “The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”

Home borrowing costs were essentially unchanged this week after the significant rise seen since a year ago. Freddie Mac reports that the 30-year fixed-rate mortgage is 5.09% this week with an average of 0.8 in points and fees. The 15-year was also near unchanged at 4.32% with a 0.8 point. A year ago that 15-year was 2.27%. Sam Khater, Freddie Mac’s Chief Economist said, “Heading into the summer, the potential homebuyer pool has shrunk, supply is on the rise and the housing market is normalizing. This is welcome news following unprecedented market tightness over the last couple years.”

Americans filing for first-time unemployment benefits continued to hover near multi-decade lows last week. Weekly Initial Jobless Claims fell 11,000 to 200,000. Continuing claims fell to 1.309 million from 1.343 million. The government jobs report will be released tomorrow where it is expected that Non-Farm Payrolls rose 325,000.

Courtesy of Mortgage Market Guide 

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Wednesday – June 1, 2022

Mortgage rates inched lower in the latest week falling three weeks in a row. The 30-year fixed-rate mortgage fell to 5.33% from 5.46% with 0.51 points for the week ended May 27, 2022, reports the MBA. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, declined 2.3%, the Refinance Index fell 5% and the Purchase Index declined 1%. Spokesperson Joel Kan said, “Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower.”

The Labor Department reports that there were a record 11.4 million jobs available across the U.S. on the last day of April. This comes at a time when there are 6.5 million people that are unemployed making it a broken job market. The number of workers quitting their jobs during March was little changed at 4.4 million meaning that those workers feel it will be easy to get another job rather easily. The labor market is still about 1.6 million workers below the level that was seen in February 2020.

Courtesy of Mortgage Market Guide 

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Tuesday – May 31, 2022

Home prices continue to rise despite the surge in borrowing costs. The S&P CoreLogic Case-Shiller 20-City Home Price Index jumped 21.2% year-over-year in March, up from 20.3% in the previous month. The U.S. National Home Price Index, covering all nine U.S. census divisions, rose 20.6% annually. “Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer. March’s price increase ranked in the top quintile of historical experience for every city, and in the top decile for 19 of them,” says Craig J. Lazzara, Managing Director at S&P DJI.

In the news, today consumer prices in Germany have been reported to have risen at the fastest pace in 50 years while Eurozone inflation as a whole rose to a record high in May. WTI oil hit $119/bbl this morning and will endure headline inflation remains high. The national average price for a regular gallon of gasoline hit a record high of $4.62 at the pumps. The Fed’s Waller said this morning that he sees 50bp hikes at every future Fed meeting until the central bank sees substantial reductions in inflation.

The Conference Board released its Consumer Confidence Index today revealing that purchasing intentions for cars, homes, major appliances and more all cooled. The May Consumer Confidence Index fell to 106.4 versus 103.9 expected and down from 108.6 which was revised higher from 107.3. Lynn Franco, Senior Director of Economic Indicators at The Conference Board said, “Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year.”

Courtesy of Mortgage Market Guide 

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