New Job Report – a Mixed Bag of Treats ( or Tricks)
The Labor Department, today, released the latest government data for Non-farm payrolls ( employment data ) which revealed jobs losses of 20,000 for January. This was a surprise as the consensus expected a gain of 15,000 – 20,000 jobs. Surprisingly, the unemployment rate dipped to 9.7%. However, employment numbers for December were revised to 150,000 job losses as compared to initial reportings of 85,000. Furthermore the Business Survey threw in another revision that indicated an ADDITIONAL 900,000 job losses from March 2008 – March 2009 from what was previously report.
Oh well, so what are we to believe when every time we turn on the TV we hear nothing but rhetoric, propaganda, politicking, etc. However, all in all the job market does appear to be “improving”…at least there is definite signs of reduction in the number of job losses each month. But the fact remains is that the labor market remains weak. So what does this mean for the mortgage market and interest rates?
Mortgage rates continue to be favorable and in most cases, dipped back below 5%. Most likely contributing factor to this has been the string of losses with the stock market since the January 19th. Since reaching a peak of 10725 ( DOW index ), stocks have fallen to under 10,000 for the first time since November 2009. Aside from the employment situation there is a lot of unknown weighing on investors, and as is generally the case, the stock market is adverse to the unknown. With continued uncertainty and Capital Hill floundering about, stocks may continue to waiver which could be a boon for bond prices and interest rates.
Well, we all heard it – The Shot Heard ‘Round Clear Lake’ – Obama’s budget that pulled the rug out from under NASA and the Constellation Project. I am sure that this is not the end of it and the fight may just be beginning. This may not be good news for the greater Houston area and especially the Clear Lake/Bay Area, but keep in mind this is a fight that has been going on each and every year – should we fund more NASA projects or take the money for something else. The average has always been that NASA stays around and is healthy. That’s not to mean we don’t have work ahead of us. Each of us can do our part by continuing the fight – contact our Congressmen and Senators, the louder we are, the better we’ll be heard.
This is a tough one now…so many variables. On the bright side, I think it is a safe bet that mortgage rates will continue to be favorable throughout the first quarter of the year. The downside is that buyers may be more skiddish, even with the home buyer Tax Credit extended through April 30, 2009. Nevertheless, we continue to remain optimistic as market conditions remain optimal for home buyers.
Not yet! I am sure that everyone is aware of the GFE (Good Faith Estimate) and HUD changes. So far the transition has not been quite as difficult as I expected. It does, however, add quite a bit more time and detail of explanation to our clients to be sure that they have an understanding of the new processes.
FHA announced increase in the upfront Mortgage Insurance Premium from 1.75% to 2.25% effective for new FHA case numbers on or after April 5, 2010. In reality this will make very little difference to the buyers costs or payments. But, there are other changes that will have more of an impact in the very near future, including but not limited to a reduction in allowable seller contributions from 6% down to 3%.