There is no doubt that the economy, unemployment and the health of the real estate market are so dependent on each other. So if we look at the most recent unemployment numbers from the US Department of Labor, what can we expect?
Friday’s Non-Farm Payrolls and National Unemployment Rate report said that 175,000 jobs were added in May 2013 which is much better than the April 2013 numbers (149,000 jobs added). But if we dig deeper we see that the national unemployment rate for May 2013 was 7.60%. Which is higher than the April 2013 level of 7.50%. Doesn’t sound like we are moving in the right direction.
They said that this increase was because more people entered the workforce compared to the number of people losing jobs. Is it possible that more people think they can find a job? If this is true, it is a good sign that people are more confident in the economy.
Times are Still Tough All Over
It would be great to think that more people are gaining confidence in the economy and their chances at finding a job. It can be tough to find a decent job. I hate hearing the idiots that say “Just get a job” when the high unemployment numbers are mentioned. It seems that they fail to understand that it is easy to find a job. But it is tough to find a full time job that pays a decent wage and will give you enough hours.
And if we honestly look at the unemployment numbers, then we have to consider this. There are plenty of people looking for a full time job but who are unable to find a job that will give them 40 hours a week. If we consider this then we see that the actual unemployment rate was 13.8% in May 2013.
You see the government defines the national unemployment rate as the percentage of people that are actively looking for a job. Because things have been so bad for so long, some people wind up getting frustrated and have stopped looking for work after several years of unemployment. Maybe the government does not want to mention this?
All I can say is sometimes life sucks. Sometimes you have to take a job that sucks or doesn’t pay very well. Maybe you have to take 2 jobs that both suck and don’t pay very well. But please don’t ever give up. Where there is a will there is a way. Without hope, there is no hope.
Worried About What the Fed Might Do
Interest rates have risen lately because of the few hints that the Federal Reserve might change their current monetary policy and QE. Right now the Fed is buying $85 billion a month in U.S. Treasury bonds and mortgage-backed securities (MBS). This has been keeping long-term interest rates lower. But at what cost? Sure it makes the banks money but is it really helping the average citizen?
The Fed has said that it might change the QE policy if the economy and unemployment numbers improve. And as we can see, any changes to QE have a dramatic effect on the interest rates.
Which then makes mortgage rates increase.
Which means it will have an effect on the real estate market.
Which will effect both buyers and sellers right here in Upstate South Carolina.
And all across America.
So far the Federal Open Market Committee of the Federal Reserve (FOMC) is keeping the status quo as far as QE is concerned. When they just mentioned changing the QE policy, it made mortgage rates increase. So just imagine what will happen if they do actually stop or decrease the money they have been spending?
We have been seeing increasing home prices and increasing mortgage rates for some time now. But it is still a good time to buy a home for some people.
But for how long will this opportunity be around?
Mortgage rates are still super low, but you have to wonder for how long?
Have they missed the boat:
Are home prices going to keep increasing?
Is this great home buying opportunity about to end?
How can you say anything about the possibility that this great opportunity may be about to disappear without sounding like some Buy-A-Home-Now Cheerleader?