Recent Economic Reports Show Strength:
Initial Jobless Claims are new filings for unemployment benefits. The latest report was released last Thursday and showed that initial claims plunged by 47,000 to a much lower than expected 522,000. This is the lowest reading since January 11th and comes on the heels of a 52,000 reduction in the prior period’s claims. That is two consecutive weeks of significant reductions in the number of people filing for new unemployment benefits. This is very important to housing as the less people there are out of work, the more demand there will be for housing.
Initial Jobless Claims are new filings for unemployment benefits. The latest report was released last Thursday and showed that initial claims plunged by 47,000 to a much lower than expected 522,000. This is the lowest reading since January 11th and comes on the heels of a 52,000 reduction in the prior period’s claims. That is two consecutive weeks of significant reductions in the number of people filing for new unemployment benefits. This is very important to housing as the less people there are out of work, the more demand there will be for housing.
The National Home Builders Association’s Builder’s Sentiment came in at its highest level since September on stronger than expected demand. In a separate report, the Census Bureau confirmed that construction of new U.S. Homes rose in June to the highest level in seven months. Much of that demand has been sparked by the looming deadline for the $8,000 tax credit that is set to expire in November, mild interest rates, and improved consumer confidence.
What happened to rates last week:
Mortgage backed securities lost -121 basis points last week, which is a significant erosion and gave us some higher rates by the end of the week. The positive economic and housing news last week put pressure on mortgage rates. It is a natural function for mortgage rates to rise when an economy emerges from a recession. While we are not sure when we will emerge from this recession (some economists believe we already have), it is certain that we will see some economic growth in the short term. As this happens, it will put pressure on mortgage rates. Do not wait to put in an offer on your home! Take advantage of these great rates and low housing prices now!
Mortgage backed securities lost -121 basis points last week, which is a significant erosion and gave us some higher rates by the end of the week. The positive economic and housing news last week put pressure on mortgage rates. It is a natural function for mortgage rates to rise when an economy emerges from a recession. While we are not sure when we will emerge from this recession (some economists believe we already have), it is certain that we will see some economic growth in the short term. As this happens, it will put pressure on mortgage rates. Do not wait to put in an offer on your home! Take advantage of these great rates and low housing prices now!
What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional mortgage rates are based upon. So I know if there is going to be a trend reversal in mortgage rates.
Call on me anytime for an industry update.
Dave Campagna
(408) 754-3846
dave@plazaloans.com
www.facebook.com/dave.campagna
www.plazaloans.com/dave
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