Economic data was the primary force driving mortgage rates this week. Generally weaker than expected data resulted in modest improvement in rates for most of the week. This was completely offset by an increase in rates on Friday due to stronger than expected Employment data, however, leaving mortgage rates nearly unchanged from last week.
Against a consensus forecast for a decline of -50K jobs, the economy lost -36K jobs in February, and the revisions from prior months showed more jobs than previously reported. The Unemployment Rate remained unchanged from January at 9.7%, which was lower than expected. The payrolls figures and the unemployment rate are calculated from two separate sets of data. The payrolls report focuses on larger companies, while the unemployment survey covers all companies. The more volatile unemployment survey surprisingly showed an increase of 308K jobs in February, indicating that smaller companies were a source of job gains.
This week's housing data was weaker than expected. January Pending Home Sales fell 7.6%, far below the consensus forecast for a small increase. They were still 12% higher than one year ago, however. The expected surge in sales from the extended homebuyer tax credit has failed to materialize so far. The chief economist of the National Association of Realtors (NAR) suggested that unusually harsh weather "hampered shopping activity" in many regions, so a pickup in sales still may be seen as buyers take advantage of the tax credit before the April 30 deadline. For more information and free mortgage advice, please e-mail: keith@frontstreetmtg.com.
Tight Lines,
Keith
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