Mortgage rates dropped nicely to start this holiday-shortened week after they’ve been moving higher, especially before the holiday weekend. According to Freddie Mac’s weekly survey, the U.S. economy is showing resilience, and combined with concerns about the debt ceiling, mortgage rates have pushed higher, until this week where we’ve seen some improvement so far.
In other housing market news, two separate reports on housing prices are showing increases in home prices. In fact, according to one of the reports, home prices have gone up each quarter for the last consecutive 45 quarters, since 2012. So, if you’re waiting for home prices to come down before you buy, you may be waiting a long time. On the flip side, if you are a homeowner, your investment in your home has appreciated every quarter since 2012.
As for the rest of this week, it’s Jobs Week. We’ll get a look at the ADP report on private-sector job creation. Forecasters predict ADP’s May employment number at 160,000. This would compare with the April growth in private payrolls reported by the Bureau of Labor Statistics of 230,000.
As for Friday’s big jobs report, a 180,000 rise is the call for new job growth in May versus 253,000 in April. Average hourly earnings in May are expected to rise 0.3 percent on the month for a year-over-year rate of 4.4 percent; these would compare with 0.5 and 4.4 percent in April which were higher than expected. As we know, greater wage inflation can cause mortgage rates to move higher, so we’ll have to see what happens.
May’s unemployment rate is expected to edge higher to 3.5 percent versus April’s 3.4 percent which was 2 tenths lower than expected. The overall job participation rate is predicted to remain steady at 62.6 percent of Americans in the labor force.
Late last week the National Association of Realtors reported that Pending Home Sales numbers remain flat from the month prior. This is not due to a lack of demand and less about housing affordability, but rather a lack of inventory. Those in lower-rate mortgages are not putting their existing homes up for sale if they have to buy at a higher interest rate. This is a prime opportunity for home builders to come in and pick up the slack and address the country’s housing shortage.
There’s so much great opportunity for savvy buyers right now, if you know what you’re doing, and lucky for you I can help! If you or someone you know is in the market to buy now and wants to finance, let’s talk. You can reply to this email or text/call me at 818.307.6072.
