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Mortgage Market Guide: Job Growth Still Strong

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MMG Weekly 2017 Mortgage Market Guide Housing

Mortgage Market Guide: Job Growth Still Strong

  In This Issue  
     
 

Last Week in Review: February job growth surges.

Forecast for the Week: The Federal Open Market Committee meeting and monetary policy statement will likely overshadow the plethora of economic reports.

View: Must-read blogs to help boost your bottom line.

 
     
 
Last Week in Review  
     
 

“I’ve got a good job. I work hard for my money.” Brooks & Dunn. The February Jobs Report had a lot to celebrate, including job and wage growth.

U.S. employers added 235,000 new jobs in February, above the 188,000 expected, the U.S. Bureau of Labor Statistics reported. Gains in construction and manufacturing, in particular, led the surge. While December’s numbers were revised down and January’s were revised up, combined revisions totaled 9,000 more jobs than previously reported.

The unemployment rate was 4.7 percent, down from 4.8 percent, and the Labor Force Participation Rate was at its highest in a year at 63 percent. Average hourly earnings rose by 2.8 percent from February 2016 to February 2017.

Overall, this was a robust report and likely means the Fed will raise its benchmark Fed Funds Rate at its meeting on March 14-15. This is the rate at which banks lend money to each other overnight.

In housing news, home price gains continued in January. CoreLogic, a leading provider of consumer, financial and property information, reported that January home prices, including distressed sales, rose 6.9 percent from January 2016 to January 2017. The gains were due in part to lean inventories of homes for sale on the market. From December 2016 to January 2017, prices rose 0.7 percent. CoreLogic’s chief economist, Frank Nothaft, said, “Many markets have seen housing prices outpace inflation.”

While home price gains are expected to continue, the sizes of the increases are expected to be less severe. Looking ahead, CoreLogic sees a 4.8 percent increase in prices from January 2017 to January 2018.

For those in the market for a home price, home loan rates remain attractive despite recent market volatility.

If you or someone you know has any questions about current home loan rates or products, please don’t hesitate to contact me.

 
     
 
Forecast for the Week  
     
 
While the week is jam-packed with key economic reports, the March 14-15 Federal Open Market Committee meeting and release of the monetary policy statement will likely be the headline grabber.
  • Inflation data from Tuesday’s Producer Price Index and Wednesday’s Consumer Price Index will be dissected by Fed members at this week’s FOMC meeting.
  • Retail Sales will be released on Wednesday along with the Fed’s monetary policy statement.
  • Regional manufacturing numbers will be delivered in Wednesday’s Empire State Index and Thursday’s Philadelphia Fed Index.
  • On Thursday, Housing Starts and Building Permits will be released along with the usual weekly Initial Jobless Claims.
  • The Consumer Sentiment Index will be reported on Friday.

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 struggled to gain traction recently. Home loan rates remain attractive despite Bond market losses.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Mar 10, 2017)
Japanese Candlestick Chart
 
     
 
The Mortgage Market Guide View…  
     
 

4 Small Business Blogs Worth Following

There’s no shortage of bloggers offering information and opinions on the Internet. When it comes down to pure inspiration, motivation and actionable advice for business, these blogs demonstrate the right stuff.

{grow}, by best-selling author Mark Schaefer, focuses on all things marketing. The blog covers a range of how-to topics from content marketing to influence marketing, marketing strategy and actual case studies.

Harvard Business Review direct from Harvard Business School is a massive site offering clearly categorized content on leadership, entrepreneurship, work-life balance and more. Another unique feature (for a fee) is the library of guide books, which offers a deeper dive to help you solve a wide range of career development issues.

FedEx Small Business Center is the blog dedicated to helping small businesses succeed, and it’s not all about shipping. You’ll find a wide-ranging collection of actionable business-building tips from improving cold calling skills to Chamber of Commerce networking ideas.

Mari Smith is often referred to as “the Queen of Facebook” and is a Forbes Top Social Media Power Influencer. Mari’s blog can help you take your Facebook game to the next level with hundreds of ideas and tools to increase your reach and engagement.

If the list above doesn’t satisfy your bug for a blog, check out even more blogs that can help you grow your business.

Feel free to forward this email, along with these helpful tips, to your team, clients or colleagues.

Sources: Huffington Post, Inc.

Economic Calendar for the Week of March 13 – March 17
Mortgage Market Guide: Job Growth Still Strong

 

 

 

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