At blog.HSH.com we strive to write about the hot topics in the mortgage and housing markets. Once in a while we delve into personal finance, credit cards, or anything else that’s bound to have a profound impact on your bottom line.
Friday:
Another month with consistent unemployment numbers isn’t all that encouraging for a country that is struggling to find its grip on economic recovery. However, some analysts are hopeful since many predicted February’s decline of 36,000 jobs to be worse.
The “good” news is that the unemployment rate held steady — remaining at 9.7% — but last month marked the 25th time payrolls have dropped in 26 months, according to MarketWatch.com.
Mortgage shoppers continue to play tug-of-war between consistently-low mortgage rates and tight credit conditions:
[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI was unchanged from [the week prior] at 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which increased by one basis points during the latest survey cycle, landing at 4.60% for the week.
The latest Senior Loan Officer survey of lending conditions, released [last] week, revealed some fair signals that the tightening of credit conditions were starting to come to an end. For the first time since the downturn began, a net percentage of banks eased borrowing terms for Commercial and Industrial loan clients, suggesting that market conditions for these kinds of borrowers has improved considerably. Four quarters ago, over 64% of banks were still tightening, so this is a fairly rapid – and welcome – improvement.
Ah yes, time for my favorite post of the week: our weekly recap. Why is it my favorite? It means another week has elapsed, and it’s time for the weekend.
Here what was new this week on blog.HSH.com:
Friday:
The numbers look bad once again. We’ll start with the bad news, then work our way to the not-so-bad news.
Since the recession began in December of 2007, the U.S. has lost 8.4 million jobs. “In terms of job losses, this has been the worst recession since the end of the World War II more than 60 years ago,” writes Rex Nutting of MarketWatch.com. Nonfarm payrolls dropped 20,000 in January, a sizeable pool of jobs, but far less than the 150,000 (revised upward) lost in December. Moving onto the better news, the unemployment rate dipped to 9.7% from 10% last month. If the unemployment rate can continue to trend downward, it will be especially encouraging since some analysts expected the rate to remain at or above 10% for the entire year.
Trend Spotting
It’s easy to look at December’s jobless numbers and get down about the fact that 85,000 jobs were lost following November’s positive revision which found that 4,000 jobs were created, rather than the loss of the 11,000 as initially reported. It’s important that we remember to focus on the overall trend.
When you review the payroll changes over the last year, the number of jobs lost has continually improved: 584,000 jobs were lost in November of 2008, 463,000 in June of 2009, and “only” 85,000 last month.
Last week we asked if the White House jobs summit would be able to yield a cost-effective solution to stem job loss. Judging by the president’s proposals to increase employment outlined in a speech Tuesday, the answer seems to be “not really”:
The president’s proposals addressed three main areas. He focused primarily on help for small businesses, targeting them with tax credits to encourage hiring and unused Wall Street bailout dollars to increase lending. He also backed a one-year elimination of the capital gains tax on gains from new investment in small business stock and other measures.
Last week was a busy one for us here at HSH.com. We apologize that our weekly recap didn’t have a chance to go live over the weekend. You know what they say, “better late than never.”
Monday:
“Mortgage Rates Fell As Low As 4.83% Last Week“: This is the lowest 30-year Conforming rate we’ve seen in decades!
There is big news in the world of jobs today, the number of lost jobs is getting smaller. The unemployment rate fell back to 10% in November after hitting 10.2% in the month prior. Only 11,000 jobs were lost in November — some 90,000 less than some economists had predicted. Even September and October’s jobless numbers saw some improvement after the fact, the number of jobs lost during that period improved by 159,000.
Before you pop the champagne, it’s important to consider why these numbers may be as low as they are. With production levels firming, the worst of the recession falling behind us, and with millions of Americans now unemployed, we wonder if there’s anyone left to fire.
Mortgage rates seem to be one of the more consistent and stable economic factors that we’re following these days. According to the latest issue of HSH’s Market Trends Newsletter, “Rates Still ‘Exceptionally Low‘,” the conforming 30-year fixed rate closed our survey week at 5.13% at a quarter-point fee level.
“The Federal Reserve re-committed to keeping the short-term interest rates it controls at ‘exceptionally low’ levels for an undefined ‘extended period of time.’ Along with the extension and expansion of the homebuyer tax credit, these important supports should help the housing market to continue to stabilize, and may even serve to promote some refinancing activity, too.”
