Daily Rate Update: January 2nd-4th

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Friday – January 4, 2019

The Labor Department reported on Friday that 312,000 new workers were added in December, well above the 180,000 expected, and brings the three-month average to a frothy 254,000K! The 312,000 was the largest increase since February 2018’s 324,000 while October and November were revised higher by a total of 58,000. Payroll growth totaled 2.6 million in 2018, the highest since 2015 and above the 2.2 million in 2017.

On the wage front, average hourly earnings rose 0.4%, above the 0.3% expected, while year-over-year growth rose 3.2%, tied with October for the best annual increase since April 2009. The Labor Force Participation Rate ticked up to 63.1% as more Americans entered the workforce, up from 62.7% from a year ago. The U6 number, or total unemployed, remained at 7.6%, down from 8.1% a year ago. The Unemployment Rate edged higher to 3.9% from 3.7%. Overall, a very strong Jobs Report.

Courtesy of Mortgage Market Guide

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Thursday – January 3, 2019

Mortgage rates continued to decline this week due in part to U.S. Stocks melting down, which pushed Bond prices higher and rates lower. Freddie Mac reports that the 30-year fixed-rate mortgage fell four basis points to 4.51% with an average 0.50 in points and fees. Freddie Mac said, “Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

National manufacturing activity continued to expand in December while the overall economy grew for the 116th consecutive month, reports the Institute for Supply Management (ISM). In its latest reading, the ISM National Manufacturing Index fell to 54.1 in December, a decline of 5.2 points from the November reading of 59.3 and below the 57.8 expected. Two key components within the report, new orders and employment, both declined during the month. Those executives surveyed saw continued business strength, but at much lower levels.

Shares of popular iPhone maker Apple are plunging this morning after weak sales in a slowing China economy was announced. The current trade war between the U.S. and China are also impacted revenues at Apple. Apple expected revenues for October, November and December of 2018 to come in $84 billion, down from the previous projection of $89 billion. In addition, upgrades to new iPhones were not as strong as expected. Shares of Apple were trading around $144, down from its high of $234 back in early October.

Courtesy of Mortgage Market Guide

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Wednesday – January 2, 2019

CoreLogic reports that home prices, including distressed sales, rose 5.1% from November 2017 to November 2018, just below the 5.4% gain seen in October. That is down from the 7% gain seen year-over-year in March of this year. On a month-over-month basis, prices rose 0.4% from October 2018 to November. Looking ahead, CoreLogic sees a 4.8% increase from November 2018 to November 2019. “The rise in mortgage rates has dampened buyer demand and slowed home-price growth. Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during December, the highest monthly average since February 2011,” said Chief Economist Frank Nothaft.

U.S. stocks begin the first day of trading lower in sympathy with declining equity markets after headlines read of weak economic data out of Europe and Asia. China manufacturing activity contracted for the first time in 19 months as the trade issues with the U.S. begin to take their toll. Last year was rough for Stocks as the closely watched S&P fell 6.2%, its worst loss in a decade and came after the 20% gain in 2017.

The first economic report of 2019 was released this morning showing that manufacturing activity slowed in the U.S. in December. The IHS Market PMI/Manufacturing Index fell to 53.8 in December, down two points from November and a 15-month low for the index. Within the report it showed that job creation slowed to an 18-month low. In addition, the rate of inflation fell to an 11-month low in December while business confidence is at its lowest level since October 2016.

Courtesy of Mortgage Market Guide

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