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Mortgage Market Guide: Home Prices Jump, Job Creation Slumps

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Home Price, Home Prices, Fed Holiday

Mortgage Market Guide: Home Prices Jump, Job Creation Slumps

  In This Issue
     
 

Last Week in Review: Once again, home prices experienced big gains.

Forecast for the Week: The Fed will be focusing on inflation, manufacturing and more.

View: Don’t let your data be held hostage.

 
     
  Last Week in Review
     
 

“Seems there ain’t no end in sight.” Garth Brooks. Home prices jumped again in July, rising 1.1 percent from June. How high will they go?

Home Prices Jump, Job Creation Slumps

home prices around the country, including distressed sales, have risen 6 percent from July 2015 through July 2016, according to data analytics firm CoreLogic. Low home loan rates will likely fuel home purchases in the year ahead. Limited inventory, however, could further drive home prices up because the supply is not meeting demand.

Meanwhile, job growth slowed in August, the Bureau of Labor Statistics reported. Non-farm Payrolls grew by 151,000, below the 180,000 expected. June and July collectively saw a net revision lower of 1,000 new jobs. In addition, average hourly earnings rose by a disappointing 0.1 percent versus the 0.2 percent expected.

And while the Unemployment Rate remained at 4.9 percent, the Labor Force Participation Rate (LFPR) held steady at 62.8 percent, which is near multi-decade lows. The LFPR measures the number of people who are either employed or actively looking for work, and it should be moving higher in a recovery.

The good news is home loan rates are still hovering in historically low territory. For people in the market for a home right now, good rates can help offset home price increases.

Please contact me with any questions you might have about home loans or rates.

 
     
  Forecast for the Week
     
 
Leading up to the September Federal Open Market Committee meeting, Fed members will be zeroing in on this packed economic week.
  • Thursday is chock full of reports including weekly Initial Jobless Claims, Retail Sales and the Producer Price Index, which measures wholesale inflation.
  • Also on Thursday, look for regional manufacturing data from the Philadelphia Fed Index and Empire State Index.
  • Friday brings the Consumer Price Index and Consumer Sentiment Index.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds are still hovering near multi-year highs. Home loan rates remain in historically low territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Sep 09, 2016)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View…
     
 
Don’t Become a Data Hostage
Keeping data secure is growing in importance for small business owners. Each day over 4,000 businesses have their data hijacked and held hostage. Hackers can literally hold data for ransom until you pay, sometimes thousands of dollars.
 
Know the basics to prevent you and your company from falling victim:
 
1. Follow the A-B-Ds.
Always back up data. Small businesses should have a systematic process in place to regularly back up data via encrypted, cloud-based data storage and recovery solutions. The ability to access back-up data will provide incredible peace of mind knowing you will never have to pay a ransom to restore data.
 
2. Don’t fall for a fake.
Understand how to spot a fake email, even if it looks like it comes from someone you know. Warning signs include mismatched URLs, spelling and grammar errors or requests for personal information.
 
3. Break the connection.

If you suspect your computer is experiencing any level of breach, make sure you know how to disconnect your computer from the network, either virtually or the physical Ethernet cable. Viruses spread easily and quickly through networks, so disconnecting can prevent further damage.

For most businesses, data is one key asset worth taking a few extra steps to protect. Understanding how to protect your data will help you avoid security threats and modern cyber crime.

Please feel free to pass these helpful tips along to your team, clients and colleagues.

Sources: Smart Hustle, TechRepublic

Economic Calendar for the Week of September 12 – September 16
Home Prices Jump, Job Creation Slumps

 

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Questions, Comments or For more information you can contact Christian Penner at: Call/Text: (561) 373-0987 or visit us online at www.ChristianPenner.com

The Christian Penner Mortgage Team, A Branch of 
American Financial Network, Inc

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Call/Text: (561) 373-0987


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