Stocks, Rates and Jobs Data: The Weekly Market Update


Jobs Share Brexit Spotlight

Brexit? No problem for our Teflon stock market. It took only a few days for our stock market to recover from the Brexit shock. We talked previously as to how resilient our markets have been. The next question: Will the markets use the momentum from this recovery to move past the levels we have seen for over a year?

Meanwhile, we ended last week’s commentary by referring to the hope that “rates stay low.” When we look back at that statement, it is almost laughable. Rates were low before they came down even further in response to Brexit. In perspective, from 1971 to 2008, a period of 37 years, the Freddie Mac rate survey never showed 30-year fixed rates below 5.0%, with the average closer to 7.0%. Today’s rates are close to half of this average rate. So we perhaps should say, “if rates stay ridiculously low.”

This week we had economic news which finally took some attention away from Brexit. June’s job numbers came in well above expectations, with 280,000 jobs added for the month. Ordinarily this strong jobs report would cause rates to surge higher, but when you look at the numbers in perspective, they were not quite as strong as they appear because it was a bounce back from virtually no job growth the previous month and the unemployment rate ticked up a bit to 4.9%. A higher unemployment rate at the same time that we had major jobs growth means that more Americans have reentered the job market, which is actually a good long-term sign. The bottom line? For now, the job market remains strong, but the long-term effects of Brexit have not been felt. Thus the markets are still expecting no action with regard to the Federal Reserve raising rates when they meet in a few weeks.

The Weekly Market Update

Rates continued to move lower in the wake of the Brexit vote, approaching lows seen only one-time in history. Freddie Mac announced that, for the week ending July 7, 30-year fixed rates fell to 3.41% from 3.48% the week before. The average for 15-year loans also decreased to 2.74% and the average for five-year adjustables moved down to 2.68%. A year ago, 30-year fixed rates were at 4.04%, more than one-half of one percent higher than today's levels.

Attributed to Sean Becketti, chief economist, Freddie Mac -- "Continuing fallout from the Brexit vote drove Treasury yields lower again this week. The rate on 30-year fixed loans followed Treasury yields, falling 7 basis points to 3.41 percent in this week's survey. Rates on home loans have now dropped 15 basis points over the past two weeks, leaving them only 10 basis points above the all-time low."

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Special Event:  Targeting and Serving First Time Buyers

We are sponsoring a special webinar and you are invited!

Wednesday, July 13 | 2:00 pm to 3:30 pm EDT | Register Here

First time home buyers are back. Historically, first time buyers have fueled the real estate markets with a market share of over 40% and at times approaching 50% of the entire real estate market. In the past few years, investor transactions have risen as the market share of first time buyers has slipped closer to 30%. But now that number is rising again.

In addition, investors are more likely to purchase directly from banks and institutions. They are also more likely to have established real estate agent and loan officer relationships. Therefore, first time buyers represent a much higher percentage of the market with regard to the use of real estate and mortgage professionals.

We are already seeing the increase in real estate prices scaring investors off and higher rents pushing first time buyers towards purchasing. There is a huge amount of latent demand built up from the Millennial Generation – a generation which is larger than the Baby Boomers.

So where do you find these first time buyers? How do you become a specialist in this segment? First time buyers have special needs and require specialized care. This seminar is designed to help you bolster your service to first time buyers as well as your marketing effectiveness to the segment. In this seminar, noted author and industry expert Dave Hershman will cover…

  • The importance of the first time buyer market
  • What is required: knowledge and leadership
  • The three economic reasons to own a home: leverage, rental equivalency & inflation hedging
  • Special needs of first time buyers
  • Special tools for first time buyers — pre-approvals and more
  • Putting together a marketing plan

Don’t miss this special event!