Summit Realty

U.S. Posts Its 20th Straight Month Of Job Growth

For the second straight year, the jobs market looks to be slowing into the summer.

Last Friday, in its monthly Non-Farm Payrolls report for May 2012, the Bureau of Labor Statistics reported 69,000 net new jobs created, plus a one-tick rise in the national Unemployment Rate to 8.2%.

2012 is shaping up like 2011, it appears.

Last year, between May and August, the jobs market was decidedly worse as compared to the rest of the year, adding just 80,000 jobs on average per month as compared to 190,000 new jobs created on average during each of the other 8 months.

This year, a similar slowdown may be in store.

Although the May jobs report marks the 20th consecutive month during which the U.S. economy added new jobs, the reported figure fell well short of analyst expectations, which called for 150,000 net new jobs last month.

In addition, it was found that the previously-reported tallies for new jobs created in March and April were overstated by a total of forty-seven thousand jobs. This lowered the overall net new jobs created last month to 22,000.

Mortgage rates in San Marcos are falling on the news.

Since the jobs report’s release, 30-year fixed rate mortgage rates have dropped below Freddie Mac’s reported 3.75% mortgage rate for borrowers willing to pay 0.7 discount points plus closing costs; and, the 15-year fixed rate mortgage has dropped farther below 3.00%.

The weaker-than-expected data has moved Wall Street investors away from stock markets in favor of the relative safety of bond markets, a market which includes the one for mortgage-backed bonds. When mortgage-backed bonds are in demand like this, it helps to push down mortgage rates nationwide.

That’s exactly what we’re seeing.

Mortgage rates are expected to make new lows this week, in part, because of U.S. employment weakness. Should this year’s jobs market rebound like in 2011, though, look for mortgage rates to climb back shortly.

Tags: Job Growth, Non-Farm Payrolls, Unemployment Rate

Make A Mortgage Rate Plan Ahead Of The Jobs Report

Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move.

It’s a risky time for California home buyers to be without a locked mortgage rate.

The action begins at 8:30 A.M. ET Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.

The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.

In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.

For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.

Based on the accuracy of those predictions, mortgage rates in Oceanside are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if the actual number of jobs created falls short, mortgage rates should drop.

Job growth’s link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street’s growth projections for the economy. When that happens — especially in a recovering economy such as this one – mortgage rates tend to rise.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability in Ranch Del Oro, among other areas.

Tags: Home Affordability, Jobs Report, Non-Farm Payrolls

Homes Get More Affordable On March Jobs Data

Americans continue to get back to work.

Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.

The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.

The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.

Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.

It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short.

Lucky for you, Wall Street’s pain is Main Street’s gain. After the jobs report was released, mortgage rates immediately dropped to a 3-week low, making homes more affordable in California and throughout all 50 states.

The market’s reaction is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.

The economy shed 7 million jobs between 2008-2009 and has since added more than half of them back. Wall Street pays close attention to job creation because more working Americans means more consumer spending, and more consumer spending means more economic growth.

Rate shoppers caught a bit of a break on the March payroll data. By all accounts, the labor market recovery in underway and, as it improves, higher mortgage rates are likely nationwide. For now, though, there’s a window for low mortgage rates that buyers and would-be refinancing households can try to exploit.

If you’re actively shopping for a home or a mortgage, today’s mortgage rates may be at “last chance”-like levels. Once rates rise, they’re expected to rise for good.

Tags: Jobs, Non-Farm Payrolls, Unemployment Rate

Jobs Report Due Friday; Mortgage Rates Expected To Change

If you’re out shopping for a home this week, or trying to lock a mortgage rate, with Friday comes home affordability risk. Consider locking your mortgage rate today.

The March Non-Farm Payrolls report is due for release Friday morning and mortgage rates are expected to move. Unfortunately for the home buyers and rate shoppers of San Marcos , we can’t know in which direction that will be.

The prudent play may be to lock your mortgage rate today.

On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called “the jobs report”, the release is a bona fide market-mover, month after month.

Depending on how the March jobs data reads, FHA and conforming mortgage rates could rise — or fall — by a measurable amount post-release. This is because today’s mortgage market is closely tied to the economy, and the economy is closely tied to job growth.

The connection between jobs and mortgage rates is basic.

More workers leads to higher levels of consumer spending nationwide and consumer spending accounts for the majority of the U.S. economy.

In addition, when more workers are paid, more taxes are paid, too. Local, state and federal governments collect more monies when payrolls are rising which, in turn, benefits projects that purchase new goods and services, and, in many cases, results in the hiring of additional personnel.

Job creation can be a powerful, self-reinforcing cycle.

Between 2008 and 2009, the economy shed 7 million jobs. It has since recovered half of them. Friday, analysts expect to count another 200,000 jobs created. If the actual number of jobs created exceeds estimates, look for stock markets to gain and bond markets to lose. This leads to higher mortgage rates — especially with the Federal Reserve zeroed in on the labor market.

If the actual number of jobs created in March falls short of expectations, however, mortgage rates may fall.

Unfortunately, by the time the report is released, it will be too late to act on it. The release is made at 8:30 AM ET and bond markets are closed for Good Friday.

Tags: Bureau of Labor Statistics, Jobs Report, Non-Farm Payrolls

Mortgage Rates Expected To Rise On A Strong Job Report

With home affordability at an all-time high, buoyed by the lowest mortgage rates ever, it’s been a terrific time to buy or refinance a home using a mortgage.

The good times may not last, though, so today marks an ideal time to lock a mortgage rate. Friday brings risk. Here’s why.

Since 2010, weak economic conditions have been a primary catalyst for low mortgage rates in California. Over the last 12 months, though, manufacturing output has been rising, consumer spending has been climbing, and business investment has increasing.

In other words, the economy is improving. However, it’s the jobs market that’s believed to be the economic recovery keystone. When jobs come back, analysts say, so does the economy.

Assuming that’s true, a recovery may already be well underway.

According to the Bureau of Labor Statistics, the U.S. jobs market has grown for 16 straight months now, adding 2.5 million net new jobs along the way. It’s one reason why the February jobs report matters so much to housing.

Rate shoppers would do well to pay attention.

Friday, at 8:30 AM ET, the government will release its Non-Farm Payrolls report for February. Wall Street expects the report to show 210,000 new jobs were created in February, a figure slightly higher than the rolling, 6-month average for job growth. This would be a positive economic indicator.

If the analysts are correct, mortgage rates are likely to rise on the news, harming home affordability.

Furthermore, affordability could be harmed by a lot if the number of net new jobs created exceeds the 210,000 tally expected. It’s not a far-fetched scenario. Wall Street’s “whispers” put the actual jobs figure somewhere between 250,000-300,000. A reading lije this would cause mortgage rates to spike and would add money to a prospective monthly mortgage payment.

If the idea of rising mortgage rates makes you nervous, consider taking your nerves out of the equation. Call your loan officer today. Lock your rate ahead of Friday’s Non-Farm Payrolls release.

Tags: Bureau of Labor Statistics, Non-Farm Payrolls, Unemployment Rate

Home Affordability Threatened By Friday’s Jobs Report

This week, once more, we find mortgage rates are on a downward trajectory. Conforming mortgage rates have returned to near all-time lows. After Friday morning’s Non-Farm Payrolls report, however, those low rates may come to an end.

It’s a risky time for California home buyers and would-be refinancers to be without a locked rate.

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for the month prior. More commonly called the “jobs report”, Non-Farm Payrolls provides a sector-by-sector employment breakdown, and the nation’s Unemployment Rate.

In December 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates for homes in La Costa are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

The connection between jobs and mortgage rates is fairly direct.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has added jobs over 15 straight months, a streak that’s added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow’s Non-Farm Payrolls shows more jobs created than the estimated 135,000, mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

Tags: Jobs Report, Non-Farm Payrolls, Unemployment Rate

Home Affordability Set To Worsen On Thursday’s Retail Sales Data

Consumer spending continues to rise nationwide, fueled by jobs growth and a rosier outlook for the U.S. economy. Unfortunately for mortgage rate shoppers in California, it may also lead to higher mortgage rates later this week.

Thursday morning, the Census Bureau will release its U.S. Retail Sales data for December. The report is expected to show an 18th consecutive monthly increase, with analysts projecting sales volume higher by 0.4 percent from November.

This would be double the increase from last month, which saw a 0.2 percent increase in Retail Sales.

The Retail Sales report tallies receipts collected by retail and food-service stores nationwide. When the sum of these receipts rise, it puts pressure on mortgage rates to do the same. The connection is straight-forward.

Retail Sales are the largest part of “consumer spending” and consumer spending accounts for the majority of the U.S. economy — up to 70 percent, by some estimates.

As the economy goes, so go mortgage rates.

Remember: today’s ultra-low mortgage rates have been partially fueled by weak economies — both domestic and abroad — going back 4 years. Stock markets have sold off as economies have faltered worldwide, leading investors to seek refuge in the relative safety of U.S.-backed mortgage bond market. The new-found demand for mortgage-backed bonds has helped drop mortgage rates to levels never seen in history.

When economic recovery is apparent, therefore, we should expect a mortgage rate reversal, and should expect for it to happen quickly. Stock markets should rise; bond markets should fall. Mortgage rates will climb. Rate shoppers will lose.

Last week’s strong jobs report sparked hope for the U.S. economy. If Thursday Retail Sales data reveals similar strength, the risk in “floating” your mortgage rate may be too great. The safer play is to lock your rate today.

The Retail Sales report will be released at 8:30 AM ET.

Tags: Consumer Spending, Non-Farm Payrolls, Retail Sales

Friday’s Jobs Report Represents A Big Risk To Low Mortgage Rates

Have you been floating a mortgage rate? It may be time to lock.

At 8:30 AM ET Friday, the government’s Bureau of Labor Statistics will release its November Non-Farm Payrolls report. Better known as “the jobs report”, the monthly Non-Farm Payrolls figures provide sector-by-sector employment data, and tally the size of the current U.S. workforce size.

From these two elements, the national Unemployment Rate is derived.

Since topping out at 10.2% in October 2009, the Unemployment Rate has dropped to 9.0%. More than 2.3 million net new jobs have been made in the last 24 months.

Wall Street expect to see 125,000 more jobs added in November.

Depending on how closely the actual Non-Farm Payrolls data meets Wall Street expectations, Carlsbad rate shoppers could find that the mortgage market landscape has shifted beneath them. The jobs report is a mortgage-market catalyst and when its reported value differs from Wall Street expectations, the impact on mortgage rates can be palpable — especially in a recovering economy.

The connection between the jobs market and the mortgage market is straight-forward — as the jobs market goes, so goes the economy.

1. When more people work, consumer spending increases
2. When consumer spending rises, businesses expand and invest
3. When businesses expand and invest, more people are put to work

Furthermore, employees and employers both pay taxes to governments. With more tax revenue, governments embark upon new projects which (1) require the hiring of additional workers, and (2) require the purchase and/or repair of additional equipment and supplies. 

Employment can be a self-reinforcing cycle for the economy and that’s why Friday’s jobs report will be so closely watched. If the number of jobs created exceeds the 125,000 expected, mortgage rates will rise on the expectation for a stronger U.S. economy in 2012.

Conversely, if the jobs figures fall short, mortgage rates may fall. 

Mortgage rates continue to hover near all-time lows according to Freddie Mac’s weekly Primary Mortgage Market Survey. The average 30-year fixed rate mortgage is sub-4.000 percent nationwide, with an accompanying fee of 0.7 discount points. 1 discount point is equal to 1 percent of your loan size.

If you’re under contract for a home or looking to refinance, minimize your interest rate risk. Lock ahead of Friday’s Non-Farm Payrolls release.

Get your rate lock in today.

Tags: Jobs Report, Non-Farm Payrolls, Unemployment Rate