Mortgage rates remained almost entirely unchanged across 9 of the 10 loan programs we track. The FHA 30-year fixed rose in price slightly, but the rest stayed near record lows, where they have remained since October 1. The office was closed today, so we do not have updated rates to reflect any changes with the new week. Check in with our Mortgage Rate Update section around 1 p.m. on Tuesday, October 9 for the latest rates.
On Friday, October 5, the headlines were filled with positive jobs numbers: for the first time in 43 weeks, unemployment dipped below 8 percent. The 7.8 percent unemployment figure seemed to represent solid job growth, rather than an improvement induced by folks dropping out of the work force (as has been in the past). Although payrolls added just 114,000 jobs in September, the “household survey” portion of the report showed an additional 873,000 people in the workforce, the largest single-month jump in 29 years. We don’t want to detract from these positive numbers, but we do think that additional context is necessary to understand the employment situation.
We wrote a complete article examining the situation over on our website entitled “The real employment picture: digging deeper into September’s 7.8 percent unemployment picture.” We highlight three important factors to use when assessing the jobs market.
1) Are employed Americans making enough to earn a living?
Much of the jump in employment seems to be characterized by part-time workers – in September, there were 582,000 more people with part-time jobs over the previous month. The number of part-time workers grew to 8.6 million in September.
2) Are these jobs “quality”? Do they offer opportunity for advancement?
The National Employment Law Project, a New York advocacy group, estimates that 58 percent of the jobs added during the U.S. economic recovery have been low-wage occupations.
3) Lastly, wages:
The average hourly earning for all private sector jobs ticked up seven cents to $23.58 from August, an increase of 1.8 percent overthe last 12 months. However, this number is struggling to keep up with inflation.
The Consumer Price Index, a measure of inflation, was up 1.7 percent over the previous 12 months in August. With the October report due out on the 16th, inflation could come to eclipse wage increases, which would suggest a net decrease in the purchasing power of the average household.
We will get further context for these numbers over the next report before we can say with any confidence if the jobs situation is improving. The point is – be patient. We still have a long way to go.
One last note – last week, we tuned into last Wednesday’s (October 3) Presidential debate with great interest. The focus of the debate was the economy, and we were curious to hear any discussion about the housing market and mortgages. Turns out, the candidates did address the housing collapse and government regulation of banks and mortgages, albeit somewhat briefly. For a recap on the discussion, please see our article HERE.