jobless-claims-10-24

 This should be good news for interest rates rates.  Falling rates means the opportunity to refinance missed by many home owners in the spring may be open again.  Approval on HARP 2.0 loans is getting easier as well.

Also of interest is the spike over the last 4 years in the duration of unemployment.  This indicates that the percentage of employable people actually employed remains high.

 

claims-and-unemployment

Job Openings and Labor Turnover Summary

Weekly Initial Unemployment Claims decline to 350,000.

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Rates rising on economyMortgage markets worsened last week for the first time in a month as the U.S. economy showed signs of improvement, and the Eurozone stepped closer to launching its $500 billion euro rescue fund.

Conforming mortgage rates in Virginia rose last week on the whole — even though Freddie Mac’s Primary Mortgage Market Survey proclaimed that they fell.

This occurred because Freddie Mac’s weekly mortgage rate survey is conducted between Monday and Tuesday each week and, last week, mortgage rates were lower when the week began. Through Wednesday, Thursday and Friday, however, they rose.

According to the Freddie Mac survey, the average 30-year fixed rate mortgage slipped to 3.36 percent nationwide last week, while the 15-year fixed rate mortgage fell to 2.69 percent. Both rates required 0.6 discount points and both marked all-time lows.

As this week begins, to gain access to the same 3.36% and 2.69% mortgage rates from last week, Henrico mortgage applicants should expect to pay more closing costs and/or higher discount points.

Improving U.S. employment data is partially to blame.

Friday morning, the Bureau of Labor Statistics released its September Non-Farm Payrolls report. More commonly called “the jobs report”, the monthly issuance details changes in U.S. employment by sector and reports on the national Unemployment Rate.

In September, accounting for upward revisions to data from July and August, 200,000 net new jobs were created — far exceeding Wall Street’s estimates for 120,000 net new jobs created. Furthermore, the Unemployment Rate unexpectedly dropped to 7.8%.

Jobs are considered a keystone in the U.S. economic recovery. As a result, when the jobs numbers hit Friday, mortgage rates worsened, building on momentum built earlier in the week as Greece moved steps closer to accepting aid from the Eurozone.

In general, since 2010, weakness in the Eurozone has helped push U.S. mortgage rates lower. As Europe regains its footing, therefore, domestic mortgage rates are expected to rise.

This week, in a holiday-shortened week, . The Federal Reserve’s Beige Book is released Wednesday and some key inflation data is due for Friday release. Beyond that, mortgage rates will continue to take cues from the Eurozone.

 

Date Time (ET) Statistic For Market Expects Prior
10/09/12 01:15:00 PM 3-year Treasury Note Auction
10/10/12 10:00:00 AM 10-year Treasury Note Auction
10/10/12 02:00:00 PM Fed’s Beige Book Sep
10/11/12 08:30:00 AM Initial Claims 10/06/12 370K 367K
10/11/12 08:30:00 AM Trade Balance Aug -$43.8B -$42.0B
10/11/12 01:15:00 PM 30-year Treasury Bond Auction
10/12/12 08:30:00 AM PPI Sep 0.80% 1.70%
10/12/12 08:30:00 AM Core PPI Sep 0.20% 0.20%
10/12/12 09:55:00 AM Mich Sentiment Oct 78.5 78.3

 

It is a good idea to discuss locking a rate with your loan officer while mortgage rates remain near all-time lows.

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Home Opportunity Index (2005-2012)Home affordability moved higher last quarter, boosted by the lowest mortgage rates in history, a rise in median income, and slow-to-recover home prices throughout Virginia and the country.

According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011’s fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.

Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.

Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation’s heartland. 

The Top 5 most affordable U.S. cities in Q4 2011 were:

  1. Kokomo, IN (99.2% home affordability)
  2. Fairbanks, AK (97.5% home affordability)
  3. Cumberland, WV (96.9% home affordability)
  4. Lima, OH (96.0% home affordability)
  5. Rockford, IL (95.5% home affordability)

These are each considered “small markets”. The most affordable “major market” was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area’s local median income.

Not surprisingly, America’s “least affordable cities” were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.

San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took “Least Affordable Market” honors.

Just 29 percent of homes in and around New York City were affordable to households earning the area’s median income last quarter. It’s a large jump from the quarter prior during which 23 percent of homes were affordable.

The rankings for all 225 metro areas are available for download on the NAHB website.

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Most Expensive ZIP CodesIn the housing market, amenities and location have as much to do with a home’s value as the everyday forces of supply-and-demand. Whereas the latter causes home values to rise and fall over time, the former creates a starting point for said values. 

Where you live — and the features of your home — determine your home’s price range. Naturally, homes in some areas are consistently higher-valued than homes in others.

Using data compiled by real estate market data firm Altos Research, Forbes Magazine presents America’s 10 most expensive ZIP codes. California and the New York Metro area dominate the list.

  1. Alpine, NJ (07620) : $4,550,000
  2. Atherton, CA (94027) : $4,295,000
  3. Sagaponack, NY (11962) : $3.595,000
  4. Hillsborough, CA (94010) : $3,499,000
  5. Beverly Hills, CA (90210) : $3,469,891
  6. New York, NY (10012) : $3,392,574
  7. New York, NY (10013) : $3,317,962
  8. Water Mill, NY (11976) : $3,300,000
  9. Montecito, CA (93108) : $3,099,348
  10. Old Westbury, NY (11568) : $3,095,000

In fact, of the top 50 most expensive ZIP codes, only 6 are located outside of California and New York regions. 3 are Colorado resort towns — Snowmass (81654), Aspen (81611) and Telluride (81435) — one is in Maryland, one is in Florida, and the last is in Washington State.

Chicago-suburb Kenilworth (60043) is the top-ranked Midwest ZIP code. It placed 86th overall.

The Forbes list may be interesting but, to home buyers or sellers in Henrico , it should not be the final word in home values. Real estate is a local market which means that — even within a given ZIP code — prices can vary based on street and neighborhood.

Look past general data and get specific. Talk to your real estate agent for local market pricing.

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