Good morning…
You know you’re in a good mood when you lock yourself out of your
car during a downpour and laugh hysterically. Food for thought this week!
On today’s call: Markets, Housing, Interest Rates/10 year yield LOW!
- Elections in Greece and France dominated investors attention as the
week kicks off, as the sovereign debt issues of those countries are
still weighing heavily on investor’s decisions. The April jobs report
sent the S&P and NASDAQ on pace for their lowest numbers of the
year. While the unemployment rate is relatively unchanged at 8.2%,
the results indicate that there are many discouraged workers giving
up their job searches. Also, growing retirement by Baby Boomers
continues to contribute to the decline in the labor force. Seeing as
the labor participation rate is at its lowest since the end of 1981, I
can say I’m very thankful to be employed…we all should be.
- This Wednesday, the Mortgage Bankers Association will release the
Mortgage Purchase Applications index. So far this year, the index
has been weak, but keep in mind it doesn’t include all-cash buyers.
It’ll be interesting to see if the “spring buying season” is, in fact,
in season. One recent survey I saw from Fannie Mae caught my eye.
Their National Housing Survey indicated that 85% of respondents
believe owning a home is preferable to renting. The issue is that
the percentage of people who believe buying is a “safe” investment
has dropped significantly in the last 10 years. This shouldn’t come as
a surprise to anyone. However, it does pose a real challenge: how
can we, in the industry, change our clients’ perceptions about the
safety of home ownership? More food for thought….
- As I mentioned earlier, the jobs report for April was discouraging, and it
prompted a flight into Treasuries. The 10 year note yield fell to 1.872%
on Friday, the lowest in 3 months. This yield is generally considered a
benchmark for long-term consumer loans (i.e. mortgage) and it is currently
only a ¼ percentage point from the historic low set last September. As
such, the 30 year fixed rate for many buyers, can be had for under 4% now.
All other programs have seen rate decreases and so far today, nothing has
changed. This is great news for your clients!
Manny…you’re the best! Thanks for the 2 referrals. I hope these contract
negotiations go well the next couple days. If anyone needs me, you know where
to reach me. Thanks again for reading and have a great week.
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