Purchase Applications Down 20% From Same Time Last Year

The stock market has been trading in a narrow range all week.  With a lack of any real market moving data this week, it seems that all eyes are on today’s unemployment report being released at 8:30AM.  What increased the focus on employment data is that on Wednesday the Federal Open Market Committee released the minutes from their last meeting.  In the report, it is clear that the Fed is watching very closely the labor markets to determine at what pace they will continue to taper the economic stimulus program.

As everyone knows by now, the Fed has reduced their bond buying program by 10 billion a month starting with this month.  There is no set time table or schedule for future reductions as of right now, and the employment reports, both today and in the future, are expected to play a major factor in the Fed’s monetary policy decisions in 2014.

Although the Fed and investors place most of the focus on today’s national employment statistics released by the department of labor, on Wednesday the ADP Employment Report was released.  ADP estimated 238,000 private payroll jobs were created last month.  This was slightly higher than expectations.  The stock market moved into positive territory on Wednesday based on this news; however, response was tempered due to ADP’s poor track record of employment predictions over the last year.  Truth be told, ADP estimates have been more in line with the national reports over the last few months, however it seems that investors have not yet gotten over the massive employment miscalculations from ADP over the last few years.  First time jobless claims continue to remain in the 330k range.

The expectation for the Employment Report this morning is that the unemployment rate will remain at 7.0% and that the economy will add approximately 200,000 new jobs.

The big question is what about the 1.3 million people that lost unemployment benefits on December 28th?  Both sides of Congress are not in agreement on what to do and the American public is caught in the middle.

Mortgage rates for the most part have been flat for the last 2 weeks.  Minor movement up and down has occurred, but overall the rise in mortgage rates towards the end of 2013 is playing a role in housing.

Applications for purchase applications declined 1% in the prior week.  According to the Mortgage Bankers Association, applications for purchase loans are down a whopping 20% from the same time last year.  Applications for refinances tipped up last week by 5%, but that is not very significant since the total number of people refinancing at this point is much lower than in months and years past.

Next week potential market moving reports are on the lighter side once again.

·        Tuesday January 14^th – Retail Sales

·        Wednesday January 15^th – MBA Applications and Producer Price Index

·        Thursday January 16^th - First Time Jobless Claims and Consumer Price Index

·        Friday January 17^th – Housing Starts and Industrial Production

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

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