“What a feeling.” (Irene Cara) Job growth eased in July, but a closer look at the report shows that job seekers shouldn’t be too alarmed.

Non-Farm PayrollsNon-farm payrolls rose by 157,000 new jobs in July, below the 190,000 expected, the Bureau of Labor Statistics reported. However, the figures for May and June were revised higher by a total of 59,000 new jobs. The unemployment rate also fell to 3.9 percent. For the past three months, job growth has averaged 224,000 compared to 195,000 in the same period in 2017. Hobby and retail toy employment fell by 32,000 jobs in July, largely due to the closing of Toys R Us, which hurt headline non-farm payrolls and could be a one-off number. Overall, the labor market continues to produce solid numbers.

Home prices rose steadily across the nation in May. The S&P CoreLogic Case-Shiller 20-City Home Price Index rose 6.5 percent from May 2017 to May 2018. This was in line with expectations and just below the 6.7 percent recorded in April. On a monthly basis, home prices were up 0.7 percent from April to May.

The Fed met and left its benchmark Fed funds rate unchanged, as expected. This is the rate banks use to lend money to each other overnight, and it does not directly impact home loan rates. The Fed noted that economic activity is growing at a strong rate and the labor market continues to strengthen.

If these strong signs for the economy continue, stocks could benefit at the expense of mortgage bonds and the home loan rates tied to them. However, many factors impact both stocks and bonds, so it’s important to keep an eye on the overall picture. For instance, low inflation is typically good news for fixed investments like mortgage bonds, and the annual Core Personal Consumption Expenditures edged lower to 1.9 percent in June. This was down from the 2 percent recorded in May and below the Fed’s 2 percent target range.

For now, home loan rates remain attractive and near historically low levels.

After last week’s full calendar, the week ahead features just a handful of reports.

  • On Thursday, we’ll get a read on wholesale inflation via the Producer Price Index.
  • Also on Thursday, weekly Initial Jobless Claims will be released as usual.
  • The Consumer Price Index will be delivered Friday.

If you or someone you know has questions about home loan rates, please give me a call. I’m always happy to help.

Related Articles

"I'm on my way. I'm on my way. Home sweet home." (Motley Crue) July brought some mixed news for homebuyers around the country who've been looking to find their way to new homes but have struggled with limited inventory. July housing starts rebounded slightly from the steep decreases seen in…
Read More

"Home. Home on the range. Where the deer and the antelope play." (Bing Crosby) A discouraging word was heard by many potential homebuyers, as home prices continue to rise across much of the country. Research firm CoreLogic reported that home prices, including distressed sales, rose 6.8 percent from June 2017…
Read More

Summer Fun Facts Aug 1 2018

Did you know: The month of August was named for Julius Caesar’s grandnephew, Augustus, who defeated Marc Antony and Cleopatra to become emperor of Rome. As a result, the Roman Senate decided that he should have a month named after him. Snow cones, that colorful, frosty staple of summer carnivals…
Read More

"Sing with me, sing for the year, sing for the laughter, sing for the tear." (Aerosmith) Home sales declined from May to June. The ongoing inventory shortages across much of the country may have potential buyers crooning a sad song. Existing home sales declined for the third straight month in…
Read More