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Unemployment and the Recession Have We Hit Bottom?

In an interview with CNBC this morning, Nouriel Roubini, a leading Global Economist, speculated that today's job numbers, though dismal - could be setting us up for a U shaped recovery.

This is interesting, as others on CNBC this morning, also speculated that we've hit the bottom, and are due for a bounce upwards.

In fact, according to the Bureau of Labor Statistics:

"Although job losses continued in many of the major industry sectors in August, the declines have moderated in recent months."

What this means for the Immediate Housing Market: Fortunately, or Unfortunately, housing has ALWAYS been tied to jobs. In areas where people have jobs, and the unemployment rate is realatively low - people will continue to purchase homes. In areas where people are afraid of losing jobs, well, those first time homebuyer incentives probably won't help.

What this means for Mortgage Interest Rates in the Near Future: Again, Fortunately or Unfortunately, mortgage interest rates have ALWAYS been a little sadistic during times like this. I tell customers to think about it this way... At a Hospital, Business is Good = Everybody's Sick. In mortgage lending, Bad News in the Economy means Good News for Mortgage Interest rates.

The question becomes, how long will it last. The Government announced in whispers in June that they were NOT going to purchase as many Mortgage Backed Securities (MBS) as they earlier claimed they would, and in fact that the program would likely END in September.

If the Government stops purchasing MBS, we could see rates spike quickly... and after reading this, I'll bet there's pressure for them to stop the program.

Best advice?? ACT NOW! If you've been considering a 15 year refinance now is your chance to grap 4.5% on a Conventional Loan! If you're a first time homebuyer - read this, you don't want to wait!

Call Steve and Eleanor Thorne, Meridian Residential we have the Lowest Rates (right now they are CHEAP!)! 919-649-5058

Posted by Eleanor Thorne 919-649-5057 Cary Mortgage Loans on 09/04/2009 09:33 AM

Comments (10)

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Originally posted at: Mortgage Lending, NC Style: Unemployment and the Recession Have We Hit Bottom?

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10 Comments on Unemployment and the Recession Have We Hit Bottom?

SEP

In Central VA, we are fortunate to have the University of Virginia undergraduate and graduate schools as well as the UVa Medical Center and the new Couric Cancer Center being built adjacent to the Med Center.....additionally the Department of Defense is bringing in 800 new families for the expanded National Ground Intelligence Center and our private hospital is building a new campus 2 blocks from my office.....homeowners who are leaving the area and have not sold their homes are fortunate to have good rental prospects to RENT their HOMES until the market in the rest of country catches up....our market is no where near as bad as the Richmond and NoVa areas with foreclosures and appraisal issues that effect buyers' ability to close on their local purchases!

I keep hearing about the job market turning around, but I haven't seen any of the unemployed people I know being offered jobs yet.

Thanks for the links Eleanor. I love stats and the Bureau of Labor Statistics is one I hadn't seen.

Good artilce, let's get those buyers off the fence.

Elanor, until the U Shape begins to turn and go North I only then feel more comfortable. The U can go side ways for a while. With unemployment hitting all time highs in years buyers are not buying as freely as I would like. thanks for sharing the CNBC report. We are making sales but not as in years past when slow downs occurred.

Eleanor - good info on the interest rates, I never hear about things like the reduced buys in securities until you bring it up! You've called nearly every move so far...

Interesting, thanks for sharing. It'll be interesting to see how things shape up the last quarter of the year.

Hi Eleanor - Well, U is absoltuely better than W! I'm still praying for a V, but I'm that kind of pollyanna...

I am not convinced that the worst is over, I know it sounds pessimistic but I think we are going to see things get far far worse before they improve. How can you have a period of growth and say a recession (depression but no one wants to use that word) is ending without jobs. I think it is true that in some markets there are signs of improvement but that is not an all encompassing situation. Many areas of the country are still depressed and are likely to be for a long time. There is still too much inventory out there and there is no demand. Without demand things are not going to improve significantly.

Sellers still have not accepted that the good ol' days are not going to return and they still want big prices for their properties. In most markets the only thing moving is Short Sales and Foreclosures, retail properties are not even being shown. I wish I could feel that things are getting better but in our market we have not seen any sign of it yet. Businesses are still closing, agents are bailing right and left and finding work where they can, and many people are leaving this area in search for greener pastures in the larger metro areas.

So...all I know is I better become an expert in what is selling and focus my energies in that direction because otherwise I may be one of the ones fleeing to find greener pastures elsewhere.

As the economy increases the rates will have to go up lock in now and enjoy the low rates.

I do believe the time to act is now, Eleanor! (But I don't think we've bottomed out.)

Mike in Tucson

SEP

This is so true, E., but as you said it is all tied to employment. Our area seems to be recovering slowly but surely. Of course, we were one of the first to hit the wall and we should be one of the first to recover. We are seeing first time buyers out there competeing for the best homes.

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