- Volatility of mortgage rates have begun a bit now that the Feds did what they set out to do – purchase $1.25 Trillion in Mortgage Backed Securities (MBSs) and succeeded in their plan to lower home loan rates and stabilize the housing sector. While the program did strecth out a little more than they had planned to try to end the program with soft landing, the program is over and we have seen rates moev up since about March 24th. As tehe Fed now turns from buyer to seller of MBS’s, we are likely to see rates continue to rise.
- Rates still remain at reasonable levels, just not the levels we had become familiar with over 2009, they are still relatively low, it just takes a while for us to get used to them.
- There is still time to take advantage of the Homebuyers Tax Credit which is down to its last month while rates are still reasonably low still. Contracts must be executed by end of April, so if you have anyone on the fence, now is the time to come down and move forward or off as we may not see an extension of this as some people have thought.
- The official jobs report released last Friday reported 162,000 jobs were created in March, making it the largest one month increase in 3 years which added to the volatility of the rates. As well, they have revised numbers from Jan and Feb upward which brought the last 2 months net job losses to almost zero. Don’t get too excited just yet about this one – see next.
- Average hourly earnings fell 0.1% in March which could be viewed as a negative and which may indicate that companies feel no pressure to pay workers more to retain them.
- Unemployment rate remained steady at 9.7%, but if you factor in people who accepted part-time work in lieu of absent full-time work thats not available, the overall rate of unemployment rose from 16.8% to 16.9% which is a big number that continues to weigh on the labor market.
- The US Savings rate moved down to its lowest level since October 2008.
- Pending Home Sales report due out Monday – will give indicator on the health of the housing industry.
- Meeting Minutes from latest Fed Meeting due out Tuesday – the market will look at that for what was the discussion in that meeting and what does it hold for the future.
- Initial Jobless Claims report on Thursday – the market will be looking to see if the labor market can continue to make positive movement.
- Treasury Department will auction off $82 Billion in Treasuries which most will be longer maturities that compete with MBSs, these auctions could add volatility to the markets.
Home Mortgage Consultant
Wells Fargo Home Mortgage
3570 1st Ave NE
Cedar Rapids, IA 52402