The Home Buyer's Korner

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September 15th, 2014

What Home Buyers Need to Know for the Week of Sept 15, 2014

The Home Buyer's Korner LogoLast week we had little economic reports related to housing, however the unexpected increase in weekly jobless claims gained attention for many in the real estate industry and would be home buyers and sellers. Analysts addressed concerns by stating that last week’s reading of 315,000 new jobless claims was not far removed from jobless claim levels before the recession. Expectations for last week’s reading were for 301,000 new jobless claims based on the previous week’s original reading of 302,000. The previous week’s reading was revised to 304,000 new jobless claims.

Prospective home buyers and current home owners typically consider their jobs and employment security before exploring any home purchase or refinancing of their existing home loans. Last week’s readings released by the Department of Labor suggest that while weekly jobless claims increased, overall trends in hiring and continuing jobless claims indicate a stronger labor sector. The four-week average of new jobless claims rose from 303,250 to 304,000. This four-week average is typically less volatile than week-to-week readings. Continuing jobless claims increased by 9,000 to 2.49 million for the week ended August 30. The four-week average for continuing jobless claims fell by 15,500 claims to 2.50 million continuing jobless claims. This was the lowest reading for continuing jobless claims since 2007.

In other labor related news, job openings were nearly steady at 4.67 million in July against June’s reading of 4.68 million new job openings. The Labor Department reported that job openings increased by 22 percent year-over-year, with private sector jobs rising to 4.19 million job openings and government jobs increasing by 101,000 to 485,000 in July. The number of hires in July rose from June’s reading of 4.79 million to 4.87 million in July. This was the highest number of hires since 2007. Pre-recession hiring levels were approximately 5 million and suggest that U.S. labor trends are approaching pre-recession levels.

Freddie Mac reported higher mortgage rates last week.. Average rates for a 30-year fixed rate mortgage rose from 4.10 percent to 4.12 percent with a 0.50 discount point; the average rate for a 15-year mortgage was two basis points higher at 3.26 percent and the average rate for a 5/1 adjustable rate mortgage rose to 2.99 percent from the prior week’s average of 2.97 percent.

What’s Ahead for the Week?

We’ll get several reports related to housing this week. Freddie Mac’s will release its usual mortgage rates report; The National Association of Home Builders (NAHB) will release its Housing Market Index and the Department of Commerce will release data on housing starts in August.  Other real estate related reports this week include the Consumer Price Index. The Federal Open Market Committee of the Federal Reserve will release its post-meeting statement on Wednesday.