Economic News Week Review: November 10, 2014
By Tony Stevenson/SWBC Mortgage
An Associated Press report said that healthy job growth in the U.S. has reached a level of consistency unseen in nearly two decades. In the same week that voters signaled discontent with the U.S. economy, the government issued a report that showed employers have added at least 200,000 jobs for nine consecutive months-the longest such stretch since 1995. Combine it with an unemployment rate that has slid to 5.8 percent—the lowest since 2008—and the picture that emerged Friday was of a job market gaining increasing distance from the recession that officially ended nearly 5 ½ years ago. Other positive news is that U.S. factories were busier in October. Order, productivity and hiring all grew faster than they did in September, according to the Institute for Supply Management.
In other news from the Houston Chronicle: The price of a barrel of crude fell to its lowest price in three years this past Tuesday, as Saudi Arabia led what’s becoming an international standoff over who will blink first by cutting production. The slump will test the mettle of the U.S. energy surge and resolve of the Organization of the Petroleum Exporting Countries, a cartel of oil-exporting nations controlled by Saudi Arabia and other Middle Eastern nations, none of which want to be the first to risk losing oil dollars or its share of the global oil business. In Texas, oil companies and their suppliers are trying to figure out whether they should pour more money into the oil boom in Texas and North Dakota, as Saudi Arabia and it’s OPEC partners decide whether to flex their muscles in setting the price of black gold—a power they’ve welded for years but haven’t tried in face of the U.S. gusher. “There’s a game of chicken going on between OPEC and non-OPEC producers,”” said Tamara Esser, an energy analyst with Nasdaq. “No one wants to be the first mover. You’re in a weaker position.” To be honest, I personally am enjoying the lower gas prices at the pump-no matter how the prices went lower. This past weekend I paid $2.67 a gallon and I also saw other gas stations with prices lower than that.
Real Estate, Mortgage Industry, and Other Economic News
Mortgage rates edged up last week. Average U.S. long-term mortgage rates rose last week, with the benchmark 30-year loan crawling back over 4 percent, to 4.02 percent. It was the second straight week of increases in rates after they had fallen for five weeks amid concerns over global economic weakness. Plus, Fannie Mae and Freddie Mac posted profits for the July-September period as the U.S. housing market continued to recover. Fannie Mae reported it earned $3.9 billion in the third quarter. Freddie Mac posted Net income of $2.1 billion.
A mini headline in the Wall Street Journal on Sunday said that 33% of primary residences sold this year were purchased by first-time homebuyers, down from 38% last year to the lowest level since 1987, according to the National Association Realtors. The NAR said that the first-time-buyer share of home sales has typically hovered around 40% since 1981. The headwinds facing young buyers are well know: higher student loan debt, rising rents, and a weaker job market have made it harder for would be buyers to save for a down payment and qualify for a mortgage, particularly in a lending environment where banks are much less willing to overlook credit blemishes or spotty incomes. Another survey said that insufficient savings or incomes were the biggest headwinds keeping renters from buying homes. It is worth noting that the share of first-time home buyers didn’t increase during the housing bubble, when it was too easy to get a mortgage. That’s because home prices were rising. The share of first-time homebuyers fell to 36% in 2006, at the peak of bubble, from 40% in the prior three years.
If you see a Military Veteran-tell them thanks!
Economic data due this week: Monday: None scheduled. Tuesday: None scheduled-Veterans Day. Wednesday: Wholesale Inventories. Thursday: Weekly Jobless Claims. Friday: Retail sales. Friday: Import Price Index. Friday: Consumer Sentiment index. Friday: Business Inventories.
Quote of the week!
You don’t drown by falling into water. You only
drown if you stay there.
(This article is for informational purposes only and not intended for consumer distribution. Do not use it as financial and/or political advice. The opinions expressed in this article are not necessarily those of SWBC Mortgage or any of their affiliates. Information for this article from but, not limited to, the Wall Street Journal, S.A. Business Journal, NAMB, Real Estate on-line magazine, Market Watch Economic Calendar, and S.A. Express News. To be removed from this email reply “remove” in the subject line. For questions/comments contact Tony Stevenson at 1.800.460.6990 or email: (email@example.com.) SWBC Mortgage Corporation NMLS 9741, Corporate Office located at 9311 San Pedro Suite 100 San Antonio, TX 78216.
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