Daily Rate Update: July 2nd-6th

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Friday – July 6, 2018

The Bureau of Labor Statistics reports that Non-Farm Payrolls rose by 213,000 in June, above the 195,000 expected. April and May were revised higher by a total of 37,000. The Labor Force Participation Rate edged higher to 62.9 from 62.7 as more Americans entered the labor force. On the negative side of the data, average hourly earnings came in at 0.2% from the 0.3% in May, year-over-year was recorded at 2.7%, unchanged. The U6 number, or total unemployed, rose to 7.8% from 7.6%. The Unemployment Rate rose to 4.0%. Overall, it was a good report.

U.S. Stock markets pushed higher on Friday after the June Jobs Report was released. On Thursday night, Washington imposed $34B in tariffs on imported goods from China as the trade issues continue. Howerver, concerns about the conflict escalting have capped equity prices from futher gains. U.S Stocks were modestly higher in mid-morning trading.

Holiday hiring in July! Say it isn’t so! Recently, Kohl’s announced that it will be hiring seasonal workers for the back-to-school, fall and holiday shopping months earlier than ever before. With a tight labor market, Kohl’s feels it will be getting a jump on top talent before they’re gobbled up by the other retailers. We are hiring seasonal associates earlier than ever to ensure our teams are fully staffed, trained and ready to support peak shopping seasons,” Ryan Festerling, executive vice president of human resources at Kohl’s, said in a statement.

Courtesy of Mortgage Market Guide

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Thursday – July 5, 2018

After rising throughout the first five months of 2018, mortgage rates declined in the latest week and have declined in five of the past six weeks. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 4.52% this week from the 4.55% seen last week with an average 0.50 in points and fees. Freddie Mac went on to say, “Although the current economic expansion is in its 10th year, residential single-family real estate was initially slow to recover. Now, backed by the demographic tailwind provided by millennials reaching the peak age to buy their first home, the housing market should have some room to grow going forward.”

The first of two key labor market reports was released today. The ADP Private Payrolls Report shows that employers added 177,000 new workers in June, below the 180,000 expected while May was revised higher to 189,000 from 178,000. Within the report, it showed that small businesses added 29,000 workers; medium size 80,000; while large businesses added 69,000. Mark Zandi, chief economist of Moody’s Analytics, said, “Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes.” The government’s Jobs Report for June will be released on Friday morning.

The Institute for Supply Management (ISM) reports that the service sector of the U.S. economy grew for the 101st consecutive month in June. The ISM Service Index rose to 59.1 last month, above the 58.3 expected and up from 58.6 recorded in May. Seventeen of the non-manufacturing industries reported growth in June as the economy continues to expand. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

Courtesy of Mortgage Market Guide

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Tuesday – July 3, 2018

Home prices continue to rise due in part to a shortage of homes for sale on the market. CoreLogic reports that home prices, including distressed sales, rose 7.1% from May 2017 to May 2018, up 1.1% month over month from April to May. Looking ahead, CoreLogic forecasts that home prices will rise 5.1% from May 2018 to May 2019. From May 2018 to June 2018, prices are expected to increase by 0.3%.

CoreLogic also reported that during the first quarter of 2018, about 50% of all existing homeowners had a mortgage rate of 3.75% or less. May’s mortgage rates averaged a seven-year high of 4.6%, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher rate. In closing, CoreLogic states that despite high home prices, renters want to get out of their rental property and purchase a home.

Courtesy of Mortgage Market Guide

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Monday – July 2, 2018

Americans are putting home equity to work for them in 2018, and the numbers are expected to increase in the future. ATTOM Data Solutions reports that the use of home equity lines of credit (HELOCs) rose 18% in the first quarter of 2018 from the final quarter of 2017. HELOCs are also up 14% from the first quarter of 2017. In the first three months of 2017, nearly 350,000 borrowers took out HELOCs. The current HELOC dollar volume is $67 billion, far below the $140 billion seen in 2006. Freddie Mac says it expects HELOCs to continue its steady climb due in part to riding interest rates and home prices.

Manufacturing activity across the nation surged in June and the overall economy grew for the 110th consecutive month in June. The ISM Manufacturing Index registered 60.2 in June from the May reading of 58.7. The new orders and employment index were near unchanged while the other four components rose. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

With Independence Day on Wednesday, here are a few food facts: Over 74 million Americans are planning to grill out for the 4th of July. Burgers (85%), steak (80%), hot dogs (79%), and chicken (73%) are the most popular foods for the grill. Every 4th of July, 150 million hot dogs are consumed in the U.S. 750 million pounds of chicken are purchased leading up to the 4th of July. Americans spend much more on condiments than chips and dip for their Independence Day barbecues. Have a safe and happy 4th!

Courtesy of Mortgage Market Guide

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