“Workin’ for a Livin’.” (Huey Lewis and the News) iPhone maker Apple, was a downer this week as the company announced a surprise weak sales and earnings forecast for the first quarter of 2019.

Stocks and interest rates fell on the bad news, concerned that Apple, the first big tech firm to report weak growth in 2019, is the “canary in the coalmine” and that more companies will report weaker sales and earnings.

Regardless of Apple’s current woes, the U.S. economy is still humming along as was evident in Friday’s Jobs Report which showed an “eye-popping” 312,000 jobs created in December.

Adding to the good news in the Jobs Report was a 3.2% hike in wage gains year over year — the highest level in a decade.

Remember, jobs buy houses, not rates, so the positive jobs numbers and wage growth are great for housing.

But while we are on the subject of rates, the “bad Apple” news helped rates improve again this week to the lowest levels in nearly a year.

Rates have been steadily improving since early November. What happened in early November? Congress became divided. Bonds and home loan rates love uncertainty, chaos, stalemates and bad news — Congress can provide plenty of it from time to time.

It will be back-to-business this week for the first full workweek of 2019 after the two-previous holiday shortened weeks.

The closely watched Consumer Price Index for December will be released with the Fed keeping close eyes on the inflation reading ahead of the January 30th Fed Meeting. Speaking of the Fed — as of right now, financial markets are pricing in a 91% probability the Fed Funds Rate will be unchanged in 2019 — meaning no more rate hikes this year.

The U.S. government may be enduring a partial shutdown, but that doesn’t stop them from borrowing money to run our country and this coming week the U.S. Treasury will sell $78B worth of Bonds in that effort. With rates and bond yields at the lowest levels in a year, it will be interesting to see the investor appetite at these Treasury auctions. If investors demand more yield at the auctions, expect rates, including home loan rates, to tick higher.

Reports to watch:

  • The ISM Service Index will be released on Monday.
  • Weekly Initial Jobless Claims will be announced on Thursday.
  • On Friday, the Consumer Price Index will be released.

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

Source: Vantage

Related Articles

At Homebridge, we know our customers come from all walks of life, and so do we. Under the leadership of our new Office of Diversity and Inclusion, we are inspired to try new things, speak openly, and be bold. It brings us together in ways that help us stand out…
Read More of the post Mortgage Professional America Interview on our New Office of Diversity and Inclusion

There's no place like home, just ask Mackenzie Holowach. When the pandemic hit, Holowach was transferred to assist at a COVID testing site and later worked in a New Jersey ICU. Changing clothes before entering the home she shared with her sister became her norm and Holowach even spent time living…
Read More of the post Stories from the Frontline

Homebridge Launches Office of Diversity and Inclusion as Part of Commitment to Employees, The Housing Industry, And Customers Homebridge announced their newest commitments to diversity, inclusion and empowerment for borrowers and employees of the company. As of September 15th, 2020 – Homebridge has committed to the following initiatives as it…
Read More of the post Homebridge Launches Office of Diversity and Inclusion

Fall is here and as the leaves change colors you may be asking yourself, what would make my home the one I’ve always dreamed of? Maybe an inground pool, a backyard deck or even a sunroom? Lavish changes like these can certainly make a difference in how you feel about…
Read More of the post Top 3 Home Renovations and How to Achieve Them

We recognize this is a difficult time for many people. Click here or call 866-913-2951 for more information and to learn about current options available to our borrowers.