Daily Rate Update: March 4th-8th

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Friday – March 8, 2019

The Bureau of Labor Statistics reports that there were just 20,000 jobs created in February, well below estimates ranging from 173,000 to 185,000. When looking at the internal numbers, wage growth jumped 3.4% year-over-year, the largest gain since 2009. Month-over-month saw a 0.4% gain, above the 0.3% expected. The Unemployment Rate fell to 3.8%, a near 50-year low. The U6 number, or total unemployed, fell to 7.3% from 8.1%. The Labor Force Participation Rate was unchanged at 63.2% and has been rising slowly. So overall, not a bad report after the weak headline number. Housing numbers are beginning to rebound in 2019 with positive reports from New and Existing Home Sales, Housing Starts and Building Permits so far this year. The Commerce Department reports that Housing Starts rose nearly 19% in January from December to an annual rate of 1.23 million units versus the 1.18 million expected. However, starts were down 7.8% from January 2018. Construction on single-family units surged 25% month-over-month, up 4.5% year-over-year. Multi-family dwellings rose 4% month-over-month and were down 33% annually. Gains were seen in all regions across the nation except for the Midwest.

Courtesy of Mortgage Market Guide

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Thursday – March 7, 2019

After months of moderating from the highs seen last November, mortgage rates edged higher in the latest week. Rates still remain near 12-month lows, reports Freddie Mac. The 30-year fixed-rate mortgage rose six basis points in the latest week to 4.41% with an average 0.50 in points and fees. A year ago, the rate was 4.46%. Freddie Mac said that the recent lower rates and a strong labor market has led to an increase in purchase mortgage demand as the spring homebuying season kicks off.

Americans filing for first-time unemployment benefits remain near lows seen in fifty years as the labor market continues to strengthen. Weekly Initial Jobless Claims fell 3,000 in the week ended March 2 to 223,000. The four-week moving average of claims, which irons out seasonal abnormalities, fell 3,000 to 226,500. The numbers come ahead of Friday’s Jobs Report for February, which is expected to see cooling job growth after 304,000 jobs were created in January.

U.S. stocks are experiencing their worst week of 2019 this week as prices have rallied in 2019 with no real downside occurring. Since the lows seen on Christmas Eve to the highs seen on March 4, the closely watched S&P 500 rose nearly 20% on dovish rhetoric from the Fed, low unemployment, sky-high consumer confidence and positive trade hopes between the U.S. and China. However, some consolidation is currently being seen as investors cash in some chips and taking profits.

Courtesy of Mortgage Market Guide

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Wednesday – March 6, 2019

Private payroll growth slowed in February though still at a solid pace led by a slowdown in the retail and travel industries. ADP Private Payrolls estimates that 183,000 jobs were created in February with expectations ranging from 175,000 to 190,000. January was revised higher to 300,000 from 213,000. Gains were seen in the professional services, health care and education. The report comes ahead of Friday’s Jobs Report for February.

Mortgage rates edged higher in the latest week and remain just above 12-month lows, reports the Mortgage Bankers Association (MBA). The MBA reports that the 30-year fixed-rate mortgage rose two basis points to 4.67% with an average 0.44 in points. The Market Composite Index, a measure of total mortgage loan application volume, fell 2.5%. In addition, the Refinance Index fell 2% while the Purchase Index tumbled 3%.

Courtesy of Mortgage Market Guide

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Tuesday – March 5, 2019

The Census Bureau reports that New Home Sales rose 3.7% in December to an annual rate of 621,000 units, a seven-month high and above the 572,000 expected. Sales were down 2.4% from December 2017 to December 2018 while sales for November were revised lower to 599,000 from 657,000. The Northeast saw a 44.8% gain in New Home Sales, a 5% increase in the South, up 1.4% in the West and down 15.3% in the Midwest. The median sales price fell to $318,600 from $343,300 in December 2017.

The service sector of the economy rebounded in February after January’s decline which was due in part to left over market volatility and the partial government shutdown. The service sector makes up two-thirds of the U.S. economy and employs around 100 million people. The ISM Service Index rose to 59.7 in February above the 56.7 in January and above the 57.2 expected. Readings above 50 indicates expansion, below 50, contraction.

Two key labor market reports will be released this week which could show continued strength in the sector. Recently, Fed Chair Powell said that employment is broad based while the unemployment rate is low. The ADP Private Payrolls Report will be released on Wednesday while the government’s report, Non-Farm Payrolls will be released on Friday. The Unemployment Rate is near a 50-year low.

Courtesy of Mortgage Market Guide

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Monday – March 4, 2019

The U.S. Census Bureau recently released its quarterly residential vacancies and homeownership numbers for the fourth quarter of 2018. It was reported that rental prices posted their largest quarterly decline in 30 years as more renters moved to homeownership. The rental price in the fourth quarter of 2018 fell $56 to $947 after topping $1,000 for the first time in the third quarter. The report went on to reveal that the homeownership rate rose to 64.8% in the fourth quarter from 64.4% in the previous quarter and up from 64.2% in the fourth quarter of 2017.

Construction spending in the U.S. declined in December as investments in both private and public projects dropped, due in part to the government shutdown and as activity eased late in 2018. The Commerce Department reports that construction spending fell 0.6% in December from the 0.8% increase in November. Construction spending rose 4.1% in 2018, the weakest reading since 2011. The report measures the dollar value of newly completed structures. It is the most comprehensive indicator of national construction activity.

The labor markets will get a double dose of data this week from the private and public sector. The last Jobs Reports from both ADP and the government have easily exceeded analysts’ expectations. ADP Private Payrolls will be released on Wednesday with the government’s Non-Farm Payrolls on Friday. Fed Chair Powell said last week that the long period of economic growth “has pushed the unemployment rate down near historic lows.”

Courtesy of Mortgage Market Guide

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