Industry News
Mortgage Industry News
Jobless Claims Fall
01/20/2012
An improving US economic outlook was negative for mortgage rates this week. Reduced concerns about Europe also caused a partial reversal in the flight to safety trade. As a result, mortgage rates ended the week higher.
Early in the month, the December Employment report showed a larger than expected increase of 200K jobs, and the Unemployment Rate continued to move lower. This week, Weekly Jobless Claims fell to the lowest level since April 2008. The labor market is one of the most important factors in the health of the economy, and many investors now view the outlook as brighter than it has been since the financial crisis began. If this is the case, it will be great news for the economy, and job gains will increase the willingness and the ability of people to purchase homes.
The Housing sector data released this week was encouraging as well. January Existing Home Sales increased 5%, while the inventory of unsold homes declined 9%, to the lowest level since March 2005. December Housing Starts for single-family units increased 4%, and Building Permits for single-family units rose 2%. Finally, the January NAHB Home Builder confidence index rose for a fourth consecutive month to the highest level since 2007. Improving economic conditions, high affordability levels, and low mortgage rates provide solid reasons to be optimistic about the housing market.
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