Florida Mortgage Update – What’s Going On with Mortgage Rates (Week of Oct. 5, 2009) | Florida Mortgage Broker

Florida mortgage rates were looking pretty darned good at the end of last week, as economic news was less than stellar.

The Labor Department’s Jobs Report showed little in the way of positivity for US workers – reporting 263,000 jobs lost in September, which was quite a bit worse than expectations.

To make matters worse for the economy, we saw the unemployment rate increase to 9.8%, and recent Jobs Report numbers for were revised downward, showing an additional 13,000 jobs lost in July and August. (See Chart Below.)

National Average Work Week and Earnings Numbers

Tucked away within the Jobs Report were declines in the Average Work Week and in Average Hourly Earnings, both of which came in below expectations. The shortening of the Average Workweek may be telling us that more folks may be having to accept part time work.

The decline in the Average Hourly Earnings underscores general weakness in the labor market. When the labor market is weak, lost of folks are looking for work. As such, declining average hourly earnings may be an indication that companies have no pressure to raise wages…particularly with unemployment near 10%.

An improvement in Hourly Earnings will likely give us the first sign of labor recovery, so this will be important to watch in upcoming Jobs Reports.

National Personal Spending Data

Personal Spending numbers for the nation also released last week and showed an increase in spending for August at its fastest monthly pace in almost 8 years!

And while the news appears to be good for the economy, we have to take it with a grain of salt, since a large part of that spending was the result of the “Cash for Clunkers” vehicle purchasing incentive program, which has since been discontinued.

US Housing Statistics Information

Last but not least, the housing industry got a shot in the arm last week, as Pending Home Sales were up significantly at 6.4%, beating expectations.

Some of the increase is likely due to folks working fast to take advantage of the $8,000 First-Time Homebuyer Tax Credit, which is currently set to expire on November 30th.

The Case-Shiller Home Price Index also came out last week with news that home prices dropped less than expected. The report, which looks at the 20 largest cities, also showed that only 2 cities (Las Vegas and Seattle) experienced price declines when compared to the previous month. Overall, the numbers appear to indicate that the worst of the housing price declines may be behind us. (Reminder: Housing prices are incredibly localized. Take national numbers as a general barometer, only!)

The Week Ahead: October 5, 2009

Economic news will be slim this week, but that doesn’t mean we’ll be completely void of excitement! Reports issuing this week include:

ISM Services Index – This Morning
Weekly Initial Jobless Claims Report – Thursday
Balance of Trade for August – Friday

The action kicks off with the ISM Services Index on Monday morning. This report is typically less of a market mover than the ISM Manufacturing Index that came out last week, but with so few reports due out this week, the markets may be watching it closely.

Thursday will bring another weekly Initial Jobless Claims report. This weekly report continues to be important to watch as the job market plays a key role in our economic recovery. In last week’s report, Initial Jobless Claims increased by 17,000 to 551,000-which was higher than the 535,000 expected. Such huge numbers underscore the weakness in the labor market.

Finally, on Friday the Balance of Trade for August will be reported. Expectations are that the trade deficit will be reported at -32.9 Billion. Remember, a negative balance of trade-or a trade deficit-occurs when imports surpass exports.

Despite the small number of economic reports, the markets may see some volatility as the Treasury Department auctions off longer-term maturities this week, which are competitive with Mortgage Backed Securities.

With the Fed scaling back their purchases of Mortgage Backed Securities, there may be less support for Mortgage Bond prices, so this week’s auction could result in more of a wild ride than previous auctions. Remember – when money leaves the mortgage bond market, Florida mortgage rates begin to climb.

As always, if you see a Florida home loan rate you like, lock it in now. Give me a call, and we’ll get you taken care of.

I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!

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