Daily Rate Update: April 2nd-6th

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April 6, 2018 – 

Job growth slowed in March due in part to some harsh weather across the nation. The Bureau of Labor Statistics reports that there were 103,000 jobs created in March, lower than the 175,000 expected. On the surface, it looks like a disappointing report, but as you dig deeper there are positives within the numbers. February Non-Farm Payrolls were revised higher to 326,000 from 313,000 while January was revised lower to 176,000 from 239,000.

The U6 number, or total unemployment, fell to 8% from 8.2% while the Labor Force Participation Rate was steady at 62.9. Average hourly earnings came in at 0.3%, higher than the 0.2% expected while year-over-year wage growth ticked up to 2.7% from 2.6% percent in February. For the first three months of 2018, there was an average 202,000 jobs created, compared to 177,000 in the same period last year. The Unemployment Rate was unchanged at 4.1%.

Courtesy of Mortgage Market Guide

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April 5, 2018 – 

After climbing since the beginning of the year, mortgage rates edged lower this week giving potential borrowers some relief. Freddie mac reports that the 30-year fixed-rate mortgage fell four basis points this week to 4.40% with an average 0.5 in points and fees added on top of that rate. Freddie Mac says that “though rates are up slightly from a year ago, a robust labor market is helping home purchase demand weather modestly higher rates.”

U.S. employers announced large jobs cuts in March after almost a year relatively low planned layoff activity. Outplacement firm Challenger, Gray & Christmas reports that there were 60,357 planned layoffs last month, an increase of 71% from February’s 35,369 planned cuts. Last month’s total is the highest monthly total since April 2016. John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc. said, “Last month’s plans may indicate that growth could be slowing down, especially as the market continues to tighten.”

The closely watched Jobs Report for March will be released tomorrow and always carries big headline risk for traders and investors. It is estimated that employers added added 175,000 new workers in March after the blowout 313,000 created in February, while the Unemployment Rate is expected to tick lower to 4% from 4.1%. The ADP report earlier this week came in much hotter than expected – so it does set the bar a bit higher for a good number.

Courtesy of Mortgage Market Guide

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April 4, 2018 – 

Yesterday, the Trump administration put out a list of 1,300 China products it was considering hitting with tariffs. Then, last night in a swift response, China announced new tariffs on U.S. soybeans, planes, cars, whiskey and chemicals. The headlines have sent Stocks lower though they are off their worst levels. It is worth noting that there is no clear timeline on when these new proposed U.S. and China tariffs would take effect.

The first of two key labor market reports was released this morning showing that private employment growth was solid in March as the sector continues to grow. ADP reports that private employment grew by 241,000 new positions in March, above the 203,000 expected while February was revised to 246,000 from 235,000. Professional and business services led the gains with 44,000 new jobs.

Mortgage rates were unchanged in the latest week as Bond prices remained steady after their big decline that began back in early January. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate conforming mortgage was unchanged in the latest week at 4.69% with points at 0.43. In addition, the MBA reported that the refinance index fell 5% while the purchase index decreased 2%.

Courtesy of Mortgage Market Guide

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April 3, 2018 – 

Home prices continued to push higher in February due in part to the ongoing theme of limited housing supply on the markets. CoreLogic reports that home prices, including distressed sales, rose 6.7% from February 2017 to February 2018 and were up 1% month over month from January to February. Looking ahead, CoreLogic forecasts that home prices will rise 4.7% year over year from February 2018 to February 2019.

Home equity hit an all-time high at the end of February due in part to rising home values. Black Knight Financial Services reports that tappable equity rose to $5.4 trillion at the end of February, up 10% from the previous peak in 2005. “Home prices continued their upward trajectory at the national level, the amount of tappable equity available to homeowners with mortgages continued to rise as well,” said Black Knight spokesperson Ben Graboske. “Tappable equity rose by $735 billion over the course of 2017, the largest dollar-value calendar year increase on record.”

The closely watched Jobs Report for March will be released Friday morning where it is expected that employers added 175,000 new workers during the month. That expectation comes after the blowout number in January of 313,000 new positions added as the labor market continues to tighten. The 313,000 jobs created was the largest gain since July 2016 and came after a strong report in January where 239,000 Americans found work. What we need to see is a steady uptick in wage growth, which has been somewhat stagnant in past years.

Courtesy of Mortgage Market Guide

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April 2, 2018 – 

The first quarter came to an end last Thursday with the Dow Jones Industrial Average losing 2.5%, while the NASDAQ posted a 2.3% quarterly loss. The closely watched S&P 500 Stock Index fell by 1.2% for the quarter, after coming off a nine-quarter stretch of gains. Trade war fears, tariffs, the notion of higher interest rates, a tech sell-off and plain old profit-taking pushed Stocks lower in the first three months of the year after seeing all-time highs in late January.

Economic activity in the manufacturing sector grew in March, reports the Institute for Supply Management (ISM). The ISM Index registered 59.3 last month, down from 60.8 in February and just below the 60 expected. The new orders, production and employment components all decreased modestly during March. A spokesperson from the ISM said that the report indicates strong growth in manufacturing for the 19th consecutive month.A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

In housing numbers: The U.S. homeownership percentage was 63.4% in 2016, the lowest percentage nationwide since 1965 or 51 years earlier when the rate was just 63.0%. The homeownership percentage rose to 63.9% in 2017. In the fourth quarter of 2017, the rate moved up to 64.2% from 63.9% in the third quarter.

Courtesy of Mortgage Market Guide

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