Discussing construction spending, jobs and unemployment numbers, the Fed leaves their benchmark rate unchanged, mortgage rates and more!
Construction Spending Increased
From the Census Bureau:
Construction spending during September 2017 was estimated at a seasonally adjusted annual rate of $1,219.5 billion, 0.3 percent above the revised August estimate of $1,216.0 billion. The September figure is 2.0 percent above the September 2016 estimate of $1,195.6 billion.
Spending on private construction was at a seasonally adjusted annual rate of $942.7 billion, 0.4 percent below the revised August estimate of $946.2 billion. Residential construction was at a seasonally adjusted annual rate of $515.4 billion in September, nearly the same as the revised August estimate of $515.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $427.3 billion in September, 0.8 percent below the revised August estimate of $430.6 billion.
In September , the estimated seasonally adjusted annual rate of public construction spending was $276.8 billion, 2.6 percent above the revised August estimate of $269.8 billion.
Good but we still need even more affordable homes…
Zumper’s November National Rent Report showed another month of little to no change in the top 10 markets. A look into the year over year rent growth numbers, though, show that cities in the lower half, ranked 50-100, had the most drastic rent changes, either positive or negative that were over 10%. Overall, the national one bedroom rent dropped 1.4% to $1,175, while two bedrooms decreased a slight 0.7% to $1,391.
This is a national report but still very interesting that rents did not increase. Plus, this is very different from other recent reports. Something to watch without a doubt…
Americans Are Officially Freaking Out
Almost two-thirds of Americans, or 63 percent, report being stressed about the future of the nation, according to the American Psychological Association’s Eleventh Stress in America survey, conducted in August and released on Wednesday.
A majority of the more than 3,400 Americans polled, 59 percent, said “they consider this to to be the lowest point in our nation’s history that they can remember.” That sentiment spanned generations, including those that lived through World War II, the Vietnam War, and the terrorist attacks of Sept. 11. (Some 30 percent of people polled cited terrorism as a source of concern, a number that’s likely to rise given the alleged terrorist attack in New York City on Tuesday.)
So sad to see that so many people feel this way. Even sadder that we probably have ample reasons to be concerned…
Unemployment Rate Improved
From the BLS:
Total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1 percent, the U.S. Bureau of Labor Statistics reported today. The labor force participation rate decreased by 0.4 percentage point to 62.7 percent in October but has shown little movement on net over the past 12 months.
This was below expectations and wages were also weak.
Unemployment Claims Fall
In the week ending October 28, the advance figure for seasonally adjusted initial claims was 229,000, a decrease of 5,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 233,000 to 234,000. The 4-week moving average was 232,500, a decrease of 7,250 from the previous week’s revised average. This is the lowest level for this average since April 7, 1973 when it was 232,250.
Remember, the 4 week average is the number to watch since it is less volatile.
Private Sector Employment Increased by 235,000 Jobs
ADP reported that private sector employment increased by 235,000 jobs from September to October according to their October ADP National Employment Report. Check out the chart:
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute said:
The job market remains healthy and hiring bounced back with one of the best performances we’ve seen all year. Although the service providing sector was hard hit last month due to the weather, we saw significant growth in professional services, especially in the higher paid professional technical jobs. Additionally, small businesses rebounded well from the impact of Hurricanes Harvey and Irma, posting very strong gains.
Mark Zandi, chief economist of Moody’s Analytics, said:
The job market rebounded strongly from the hit it took from Hurricanes Harvey and Irma. Resurgence in construction jobs shows the rebuilding is already in full swing. Looking through the hurricane-created volatility, job growth is robust.
Nice to see things bounce back after the hurricanes. According to Reuters, this is higher than economists thought it would be so maybe so many Americans shouldn’t be freaking out?
Construction Employment Increases
Construction employment increased in 250 out of 358 metro areas between September 2016 and September 2017, declined in 56 and stagnated in 52, according to a new analysis of federal employment data released today by the Associated General Contractors of America. Association officials noted that continued strong demand for construction is placing new strains on an already tight construction labor market.
Ken Simonson, the AGC’s chief economist said:
Construction firms in many parts of the country continue to expand to keep up with demand for their services. Yet construction growth would likely have been even more robust if contractors could find more qualified construction workers to hire.
Nice! And we heard yet again that finding qualified workers is an issue.
ISM on Manufacturing and Service Sector
ISM reported that economic activity in the manufacturing sector expanded in October, and the overall economy grew for the 101st consecutive month. They also said that economic activity in the non-manufacturing sector grew in October for the 94th consecutive month.
Again, maybe Americans shouldn’t be freaking out so much?
The Fed Leaves It Benchmark Rate Unchanged
The Federal Reserve just released their latest FOMC minutes and revealed that they are leaving their benchmark interest rate unchanged:
In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.
Since the Fed does NOT directly set mortgage rates, this should NOT be interpreted as saying mortgage rates will not rise. It is, however, a good sign that we will see less upward pressure on mortgage rates. Speaking of mortgage rates…
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 3.94% with an average 0.5 point
- This is the same as last week
- Last year at this time, 30-year fixed-rate mortgages averaged 3.54%
- 15-year fixed-rate mortgages averaged 3.27% with an average 0.5 point
- This up from last week when it averaged 3.25%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.84%
Check out the chart:
The MBA reported:
Mortgage applications decreased 2.6% from one week earlier.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to its highest level since July 2017, 4.22%, from 4.18%, with points increasing to 0.43 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to its highest level since July 2017, 4.16%, from 4.11%, with points increasing to 0.27 from 0.24 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since March 2017, 3.52%, from 3.48%, with points increasing to 0.44 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
These are rates from before the FOMC minutes and we still are up in the air as to what the new Fed Chair will do…
As I say every week, these are the average mortgage rates and will not reflect what is realistic or possible for you. So much of what is possible depends on your credit score…
Thinking About Buying a Home? Know Your Credit Score
One of the very first steps when buying a home is checking your credit! Once you know your credit score and get a copy of your credit report, you can make certain you are prepared to begin the home buying process.
Be certain all the info on your credit report is accurate and correct any errors. You will able to get better interest rate for your mortgage if you have a higher credit score. This could mean a lower payment!
Lots of home buyers think that they must have a 750 FICO® Score or higher to buy a home. According to the latest Ellie Mae Origination Report, over 53% of loans were approved with a FICO® score under 750 last month!
When you know your current credit score, the next move is choosing a mortgage lender and getting a pre-approval letter. Remember, setting your home buying budget and getting pre-approved is essential!
Fannie Mae Serious Delinquency Rate Increased
From Fannie Mae:
The Conventional Single-Family Serious Delinquency Rate increased two basis points to 1.01 percent in September; the Multifamily Serious Delinquency Rate decreased one basis point to 0.03 percent in September.
We will probably see the delinquency rates increase in the coming months due to the hurricanes. However, we are getting close to a normal rate.
That’s it for today! Be sure to subscribe so you never miss another post!