Mortgage Business

November Jobs Report Released

20140309-080351.jpgWe had a pretty interesting two weeks leading up to the release of the jobs report. Not only did we have a major holiday, but we had some significant data releases. Plus we had a meeting of major oil producers (OPEC) while oil prices were reaching their lowest levels in the past five years. It was a surprise to some that OPEC kept production levels the same in the face of these lower prices, but other analysts had predicted this because OPEC is not wielding the same pricing power as they did in the previous decades.

What does the price of oil have to do with jobs? In the short run, energy prices are not as important as the effect of the severe weather we had experienced in November. But in the long run, if the price of energy stays low this helps the economy. The more consumers can spend this Holiday Season, the more jobs will be created — and when people spend less on gas they have more to spend on other purchases.

The employment report showed that our severe November weather was not a factor in hampering the economy. The strong gain in jobs of over 300,000 continued a year in which the economy has added well over 200,000 jobs on a monthly basis. Right now we have a good chance to add the most number of jobs annually since 1999. To this news, we can add that car sales had their best month in a decade and the service sector expanded at its highest rate in nine years. All-in-all it was a strong week for economic data. One would expect that shortly this success will start showing up in the form of higher real estate sales. We could experience a strong spring real estate market. 


The Markets. Fixed rates on home loans fell in the past week. Freddie Mac announced that for the week ending December 4, 30-year fixed rates fell to 3.89% from 3.97% the week before. The average for 15-year loans decreased to 3.10%. Adjustables were also lower, with the average for one-year adjustables decreasing to 2.41% and five-year adjustables falling to 2.94%. A year ago, 30-year fixed rates were at 4.46%, which is over 0.5% higher than today’s levels. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Fixed rates on home loans were down across the board in a week of underwhelming economic releases. New home sales missed consensus expectations by selling at an annual pace of 458,000 units in October and the National Association of Realtors reported that pending home sales dipped in October by 1.1 percent. The ADP’s estimate for payroll growth in November was 208,000 jobs, below expectations of 225,000.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated December 5, 2014

Daily Value Monthly Value
Dec 4 November
6-month Treasury Security 0.08%  0.07%
1-year Treasury Security 0.14%  0.13%
3-year Treasury Security 0.97%  0.96%
5-year Treasury Security 1.59%  1.62%
10-year Treasury Security 2.25%  2.33%
12-month LIBOR  0.562% (Nov)
12-month MTA  0.114% (Nov)
11th District Cost of Funds  0.671% (Oct)
Prime Rate  3.25%

  Many reports have centered on the upswing in adult millennial children moving in with their parents. But as these young professionals finally move out and form their own households, they may find that their baby boomer parents may soon coming knocking with moving bags in hand. The American Institute of Architects found that dedicated guest rooms, including in-law suites, have been surging in popularity over the last few years. In 2014, 39 percent of the AIA’s more than 500 residential architects surveyed said they were seeing more demand for in-law suites, which might include a second master bedroom suite with a bathroom or an attached apartment-like structure. By comparison, in 2012, the percentage stood at only 10 percent. “As many households become caretakers for aging relatives, separate living suites have become popular options for accommodations,” says Kermit Baker, chief economist for the AIA. The AIA also says that home features accommodating multiple generations and age-in-place features are growing in demand. Six percent of U.S.-born seniors live with relatives, and the trend is even more popular among immigrants. Twenty-five percent of foreign-born seniors live with relatives, according to a survey conducted by the real estate site Trulia. Source: MarketWatch

Open houses are a great source of information about the property, neighborhood and local markets. Nearly half of real-estate buyers go to one. Here are some tips regarding how to get the best data from an open house:

  1. Look Past Window-Dressing. A full 94 percent of sellers do some “staging,” such as repainting or bringing in new furniture, says Coldwell Banker. “You can be so wowed by staging that you overlook important things,” says San Jose Realtor Carl San Miguel. To focus on what matters, lift rugs to look at floors, ask the agent to turn off music so you can listen for nearby noise, and beware of any smells masked by candles. Also request a disclosure sheet, which lists known structural issues.
  2. You Can Learn a Lot From the Crowd. Nearly half of buyers visit open houses, says the National Association of Realtors, so pay attention to your fellow shoppers’ comments; they may have insight into how this home stacks up. Locals often pop in, too, so if someone sounds like a neighbor, ask about the area. To get a feel for demand, visit in the last hour and peek at the sign-in sheet. A full sheet could mean the home will sell quickly, says Paul Reid, a California-based agent.
  3. It’s Your Chance to Test-Drive the Place. Visiting a home in person allows you to pick up on details you won’t see in the listing, such as the strength of the water pressure and how much you could actually cram in the closets. What buyers often forget, though, is to explore the neighborhood as well, says Dallas agent Mary Beth Harrison. Get a sense of the area by checking out surrounding streets and driving home using a different route.
  4. The Agent May Be Scouting You. Listing agents will often tap a colleague to run an open house, so your host may be fishing for buyers to represent. If you’re in the market for an agent, this can be a chance to meet pros and see what they’re like on the job. Not interested? Say so upfront to fend off any confusion, says Harrison. Shoppers who already have a buyer’s agent should write his contact information on the sign-in sheet so he can handle any follow-up calls or emails on their behalf.
  5. Gathering Info for the Seller. When a listing agent is hosting, pepper her with questions. Ask whether there have been any upgrades to the property, if she’s gotten any offers, and when and why the sellers are moving. (You may get a vague reply on that last one). Keep mum on your budget, feelings about the home, and anything else that might give the seller a leg up in negotiations. “Don’t assume the agent is there to help you out,” says Chicago agent Fran Bailey. Source: CNN/Money

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