|Last Week in Review: The labor sector continues to improve, while home price gains are stabilizing at more normal levels.Forecast for the Week: Look for key reports on inflation, manufacturing and retail sales.|
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Last Week in Review
|Take this job and love it. That’s exactly what more people are doing these days, as job growth in 2014 was the strongest in fifteen years and our economy continues to improve. The December Jobs Report showed that 252,000 jobs were created, a touch above expectations. In addition, upward revisions to October and November added another 50,000-plus jobs to what was originally reported for those months. Employers added 2.95 million new jobs in 2014, with an average of 246,000 per month, above the 194,000 per month average in 2013.|
Another positive in the report is that the Unemployment Rate came in at 5.6 percent. The head scratcher was a -0.2 percent hourly earnings figure. Hourly earnings are not growing and that is keeping inflation persistently low. One positive about low inflation is that it should benefit Bonds for the foreseeable future, as high or growing inflation can cause fixed assets like Bonds to worsen. Since home loan rates are tied to Mortgage Bonds, low inflation should also help keep home loan rates low for now.
In housing news, CoreLogic reported that its Home Price Index, including distressed sales, rose by 5.5 percent annually in November. After a near 12 percent annual increase back in January 2014, prices have been decelerating, but have stabilized to a more normal 5 to 6 percent growth rate for the last four months.
The bottom line is that home loan rates remain near historic lows, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.