Chesapeake Real Estate: Mortgage News

March 13th, 2017 By Bryan Cerny in Financing,Mortgages. Tags: , , , ,

From a very trusted Mortgage Pro.  If you are looking to buy in Chesapeake or anywhere in Hampton Roads, Jim is a man to call.

Strong Job Gains 

 

Stronger than expected U.S. labor market data was negative for mortgage rates over the past week. Increased expectations for tighter monetary policy from the central banks in the U.S. and Europe also were unfavorable. As a result, mortgage rates ended the week higher.

 

On Wednesday, ADP, a private payroll firm, estimated that there were an enormous 298,000 private sector jobs added in February, far above the consensus of 190,000. This was great news for the economy. However, faster economic growth raises the outlook for future inflation, making it negative for mortgage rates. Fearing that Friday’s more highly regarded Employment report from the Bureau of Labor Statistics (BLS) would exhibit similar strength, mortgage rates moved higher on Wednesday and Thursday.

 

The BLS report revealed that the economy added 235,000 jobs in February, a little above the consensus forecast of 190,000. Although the BLS report was a little stronger than expected overall, it was weaker than some investors had feared, and on Fridaymortgage rates recovered a portion of their losses.

 

With the recent string of strong economic data, investors are now nearly certain that the U.S. Fed will raise the federal funds rate at its meeting on March 15. Investors also have significantly raised their outlook for the pace of rate hikes in 2017. In addition, stronger economic growth in Europe may lead to less accommodative monetary policy from the European Central Bank (ECB). At its meeting on Thursday, the ECB made no policy changes, but the tone of ECB President Mario Draghi’s press conference was a little more hawkish. In particular, he said that there is no longer “that sense of urgency” to provide new stimulus measures.

 

Compliments of

Jim Belote

Vice President of Sales | NMLS: 254207

Tidewater Mortgage Services, Inc.

NMLS: 71158

Direct: 757.690.8047Mobile: 757.287.3873
eFax: 757.605.4982

[email protected]www.jimbelote.com

200 Golden Oak Court | Suite 100

Virginia Beach, VA 23452

    

 

Wednesday will be the big day next week with reports on Retail Sales and CPI in the morning and the results of the Fed meeting in the afternoon. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. The Consumer Price Index (CPI) is a widely followed monthly inflation report that looks at the price change for goods and services which are purchased by consumers. As mentioned, the Fed is widely expected to hike rates, so investors will be focused on hints about the pace of future tightening. After that, Housing Starts will be released on Thursday, and Industrial Production will come out on Friday.

 

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