Daily Rate Update: October 3rd-7th

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Thursday – October 6, 2022

Mortgage rates eased this week and are double what they were last year. Freddie Mac reports that the 30-year fixed-rate mortgage inched lower to 6.66% from 6.70% with an average of 0.8 in points and fees. A year ago the rate was 2.99%. The 15-year fell to 5.90% from 5.96% with 1 point. A year ago the 15-year was 2.23%. “Mortgage rates decreased slightly this week due to ongoing economic uncertainty,” said Sam Khater, Freddie Mac’s Chief Economist. “However, rates remain quite high compared to just one year ago, meaning housing continues to be more expensive for potential homebuyers.”

U.S. firms across the country planned layoffs in September as the sector is showing signs of slowing. Yesterday, the Labor Department reported that there were over 1 million fewer jobs available in August from July. Outsourcing firm Challenger, Gray & Christmas announced that job cuts in September rose 46% to 25,989 in September from the August number of 20,485. That is up 67.6% from the September 2021 announced cuts of 17,898. “The cooling housing market and Fed’s rate hikes are leading to job cuts among mortgage staff at banks and lenders. The recession concerns are leading to increased uncertainty, and companies across sectors are beginning to reassess staffing needs,” said Challenger.

Americans filing for first time unemployment benefits rose to 219,000 in the week ended September 30 and up from 190,000 in the previous week. Continuing claims rose to 1,316,000 from 1,346,000. The four week moving average, which irons out seasonal abnormalities, came in at 206,500. The Jobs Report for September will be released tomorrow at 8:30 a.m. ET. Expectations are calling for a gain of 250,000 jobs after 315,000 were created in August for Non-Farm Payrolls. Within the report are revisions to previous months as well as the hourly earnings data, the Labor Force Participation Rate and the U6 number or total unemployed.

Courtesy of Mortgage Market Guide 

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Wednesday – October 5, 2022

Home borrowing costs increased in the MBA’s latest survey hitting levels not seen since 2006. The 30-year fixed-rate mortgage rose to 6.75% from 6.23% with 0.95 points for the week ended September 30, 2022. Within the data, it showed that the Market Composite Index fell 14.2%, the Refinance Index lost 17.8% and the Purchase Index declined 12.6%. Spokesperson Joel Kan said, “Mortgage rates continued to climb last week, causing another pullback in overall application activity, which dropped to its slowest pace since 1997. The 30-year fixed rate hit 6.75 percent last week – the highest rate since 2006.”

Private payroll growth rose in September from the August number which was revised higher as the somewhat cockeyed labor market marches on. ADP Private Payrolls rose 208,000 last month and up from the 185,000 created in August. Expectations were calling for a gain of 200,000. “There are signs that people are returning to the labor market. We’re in an interim period where we’re going to continue to see steady job gains. Employer demand remains robust and the supply of workers is improving … for now,” said ADP Chief Economist Nela Richardson.

On the flip side, 91% of U.S. CEOs believe that there will be a recession in the next 12 months and only 34% think it will be mild and short. Half are already planning layoffs. The survey was taken by KPMG. Also, remote working has had a positive impact on hiring, collaboration and productivity over the past 2 years, but 65% of CEOs see in-office as the go-to office environment over the next 3 years.

Courtesy of Mortgage Market Guide 

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Tuesday – October 4, 2022

The number of available jobs across the nation fell in August from July while the unemployment remains low. Also, Americans filing for first time jobless benefits are near historic lows. The Labor Department’s Job Openings and Labor Turnover (JOLTS) survey showed there were 10.05 million jobs available on the last day of August down from 11.23 million at the end of July. This week the markets will receive data from the ADP private Payrolls Report on Wednesday and the government’s Non-Farm Payrolls report on Friday.

With home borrowing costs now more than double from what was seen last year, potential home buyers can now afford less of a house size. Redfin reports that the typical home buyer has seen the size of a home fall by 100 square feet on average. Redfin cites this example: A San Diego homebuyer with a $3,000 monthly budget can afford a 931-square-foot home at today’s 6.7% mortgage rates, down from the 1,366-square-foot home the same buyer could have purchased a year ago, when rates were sitting near record lows at 3%.

Courtesy of Mortgage Market Guide 

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Monday – October 3, 2022

Manufacturing activity across the nation fell in September from August while a key inflation component fell for the sixth straight month. The ISM Manufacturing Index fell to 50.9 in September from the August read of 52.8 and below 52.2 expected. The inflation reading Prices Index registered 51.7, down 0.8 compared to the August figure of 52.5 percent. This is the index’s lowest reading since June 2020 (51.3). A spokesperson said, “The U.S. manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began.”

Two key job reports will be released this week as the sector continues to see historically low requests for first time unemployment benefits. Also, there are 11 million jobs available across the U.S. with 5.5 million unemployed. The ADP Private Payrolls Report will be delivered on Wednesday and Non-Farm Payrolls on Friday. The most closely watched data, Non-Farm Payrolls, are expected to see 250,000 new jobs created.

After the recent sky high prices seen for gas prices at the pump and subsequent decline, motorists are now seeing an uptick. The national average price for a regular gallon of gasoline rose to $3.80 from $3.72 a week ago. That is down from the all time of $5.01 on June 14, 2022. “The regional differences in gas prices are stark at the moment, with prices on the West Coast hitting $6 a gallon and higher, while Texas and Gulf Coast states have prices dipping below $3 in some areas,” said Andrew Gross, AAA spokesperson.

Courtesy of Mortgage Market Guide 

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