Reports on employment were abundant over the past week. The number of jobless claims decreased by 20,000 to 268,000 in the March 28 week. Apart from the 267,000 reading in week of January 24, this is the lowest number of jobless claims since April 2011. As was expected, the unemployment rate is holding steady at 5.5%.
The number of payroll jobs increased by 126,000 in March after an increase of 264,000 in February and 201,000 in January. March’s numbers fell short of the 247,000 increase expected by analysts as employers added the fewest number of jobs since December 2013. There is speculation that this slowing in the addition of new jobs could prevent an earlier rate increase by the Fed, especially if job creation numbers continue to come in lower than expected. On the other hand, Omair Sharif, rates sales strategist at Societe Generale in New York, remarked, “Hiring just took a breather. I wouldn’t read this as anything other than that.” He went on to predict that job growth “should get back on track in the second quarter.”
On the up side, average hourly earnings rose by 0.3% last month, surpassing the 0.2% increase that had been previously forecast; this is a 2.1% increase from a year ago.
Construction spending dipped 0.1% in February after falling 1.7% in January. Expectations were for a 0.2% increase. Despite this drop in spending, total outlays were up 2.1% in February on a year-ago basis, compared to the 1.4% increase in January. Analysts believe that adverse weather in some parts of the county could be affecting construction numbers.
American consumer comfort levels rose for the third straight week in the week ending March 29, finishing off the best quarter in nearly 8 years. Bloomberg’s Consumer Comfort Index rose to 46.2 the last full week of March from 45.5 the prior week, making it the second highest reading since July 2007. According to Bloomberg, Americans’ views of their finances and the buying climate have been boosted by greater purchasing power. Consumers may be more motivated to spend as the stronger dollar makes imported goods less expensive and gas prices creep lower. Consumer spending makes up about 70% on the U.S. economy, and is primarily supported by better employment opportunities and buying conditions.
Mortgage News & Rates
Mortgage applications are up for the second week straight, according to data from the Mortgage Bankers Association. Purchase applications rose by 6.0% in the March 27 week, while refinancing applications went up by 4.0% the same week.
National mortgage Rates increased very slightly this week, but continue to remain low. Freddie Mac’s weekly mortgage rate survey reported the average rate for a 30-year fixed rate mortgage was at 3.70% on April 2, up 1 basis point from 3.69% on March 26.
Here on the Central Coast the majority of the loan programs saw no movement since March 25, with the exception of the 30-year conventional, 30-year high balance, and 30-year FHA 203k programs, which all displayed slight increases. Despite the slightly higher rates in the latter three programs, rates continue to be significantly lower than the same week one year ago; the current rate for a 30-year fixed conventional loan is 3.625% (3.680% APR) compared to 4.500% (4.524% APR) one year ago. Similarly, the current rate for a 15-year fixed conventional loan is 3.125% (3.195% APR) compared to 3.500% (3.530% APR) the same week last year.
As rates remain on the low end, now is a great time to consider a home purchase or refinance! Give us a call at 805.543.LOAN for a free, customized rate quote.