Last week’s economic reports included readings on construction spending and labor reports on public and private-sector job growth. The national unemployment rate was released along with weekly reports on mortgage rates and weekly jobless claims.
Construction Spending dips in September, but Residential Construction Spending Rises
Construction spending rose 0.10 percent in September, but residential construction spending fell 0.70 percent month-to-month. Construction spending was 4.10 percent higher year-over-year. January through August construction spending was 5.30 percent higher than for the same period in 2017.
Analysts estimated a shortage of approximately four million homes; which accentuates demand and drives prices up. In recent years, builders have concentrated on higher-end homes, but analysts said that a shift to building super-affordable homes may be in the works. High home prices and ever-increasing rents are squeezing moderate-income families; providing more affordable housing options could lessen demand and help home price growth to normalize.
Mortgage Rates Little Changed, New Jobless Claims Lower
Freddie Mac reported little change in mortgage rates; 30-year fixed rate mortgages averaged one basis point lower at 4.71 percent. The average rate for a 15-year fixed rate mortgage was also one basis point lower at 4.15 percent. Rates for 5/1 adjustable rate mortgages averaged 4.01 percent and were four basis points higher. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
First-time jobless claims fell last week to 207,000 new claims filed as compared to expectations of 213,000 new claims filed and the prior week’s reading of 214,000 claims filed. Analysts said that fewer claims were filed as the impact of Hurricane Florence diminished.
Labor Reports: Job Growth Mixed as Unemployment Rate Nears 49 Year Low
Commerce Department readings on public and private-sector job growth showed more private sector jobs, while the government reading for public and private sector jobs dropped/ ADP reported 230,000 more private-sector jobs in September; the government’s Non-Farm Payrolls report showed 134,000 new public and private sector jobs as compared to 270,000 new jobs in the prior month. Analysts expected 168,000 new public ad private sector jobs and said that the shortfall in job growth for September was a consequence of Hurricane Florence.
The National Unemployment Rate fell to 3.70 percent in September, which was the lowest reading in nearly 49 years.
What‘s Ahead
This week’s scheduled economic releases include readings on inflation, core inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.