Mortgage rates ticked upward for fixed rate loans and were unchanged for 5/1 adjustable rate mortgages according to Freddie Mac. Weekly jobless claims were lower in spite of slower job growth reports.
Last week’s economic events included several reports on jobs and unemployment including the ADP report on private-sector payrolls, the Department of Labor’s reports on non-farm payrolls and the national unemployment rate. The details:
Mortgage Rates, Pending Home Sales Weekly Jobless Claims
Fixed mortgage rates rose by one basis point for both 30 and -15-year mortgages. The average rate for a 30 year mortgage rate was 3.80 percent and the average rate for a 15-year mortgage was 2.98 percent.
The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.92 percent. Average discount points for fixed rate mortgages were unchanged at 0.60 percent and rose from an average of 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.
The National Association of Realtors® reported that pending home sales for February increased by 3.10 percent against an expected reading of -0.20 percent and January’s reading of 1.20 percent. This was a welcome surprise in light of severe winter weather conditions throughout much of the U.S.
Weekly jobless claims were lower at 268,000 new jobless claims as compared to the prior week’s reading of 288,000 new claims and expectations of 285,000 new jobless claims. Analysts note that week-to-week reports of jobless claims are volatile, and the four-week-rolling average is a better source for identifying jobless trends.
Non-Farm Payrolls, ADP Payrolls Lower
Labor markets received unwelcome readings as the Labor Department’s Non-Farm Payrolls report fell far shy of expectations and the ADP report, which measures private sector jobs, fell below February’s reading. Non-Farm Payrolls for March reflected only 126,000 jobs added against estimates of 243,000 jobs added and February’s reading of 264,000 jobs added.
This was the lowest reading for Non-Farm Payrolls in 15 months. The March reading raised questions concerning the potential for another economic slowdown and whether or not lower readings for labor reports signaled a temporary slowdown or indicated broader challenges to the economy.
ADP reported 189,000 private-sector jobs added in March as compared to February’s reading of 214,000 jobs added. This was the lowest reading since January, 2014. The ADP report is seen by analysts as a precursor of the Non-Farm Payrolls report.
The National Unemployment Rate was unchanged at 5.50 percent in February; this report lags a month behind Non-Farm Payrolls and ADP reports, so does not reflect the drop in job growth for March.
Labor markets are a priority for prospective and active home buyers as mortgage approval and the ability to afford a home hinges on steady employment. Housing markets could be in for more challenges unless dropping job growth proves to be a temporary situation.
What’s Ahead
This week’s scheduled economic releases include reports on job openings and minutes of the last FOMC meeting along with Thursday’s reports on mortgage rates and weekly jobless claims.
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