Thursday, December 4, 2014

TBT Thursday Real Estate and Mortgage Markets

 Spring, Texas Real Estate by numbers

A new year is about to dawn—and the outlook on the housing market is definitely brighter. After all, 2014 was the best year in the U.S. economic recovery since the recession of 2008-2009.With an accelerating economic recovery fueling job and income growth, prospects are good for homeowners and would-be home buyers

Mortgage prices better early, treasury markets quiet also slightly better. At 8:30 weekly claims were in line with forecasts, down 17K to 297K. The four-week moving average, which smooth’s out the data, increased by 4,750 to 299,000. The U.S. labor market reached its longest stretch of job creation since at least World War II in October and is on pace to post the best yearly gain in employment since 1999; most low paying but markets don’t care, a job is a job as far as economists are concerned. The fact that the high majority of jobs are part-time, or low paying, or both, is reality but is best ignored by investors.

Tomorrow is employment day; cyber-data day. Estimates are unchanged form earlier this week; non-farm jobs +225K, private jobs 230K; non-farm private jobs if they match estimates would be 16K better than growth in October. Unemployment unchanged at 5.8%, average hourly earnings +0.2%.

The 10 has support at 2.30% and is holding after the volatility over the weekend that dropped the rate to 2.17%. Our models still holding slight bullish reads, however all of our studies are only marginally positive. A close over 2.32% on the 10 will turn everything bearish. We continue to believe rates are not going to increase much through the rest of this year. Much depends on consumer spending over the holidays, so far consumers are spending but not as significantly as analysts had thought so far. 

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