Week of March 12th: Economic Roundup

March 13, 2012 by · Leave a Comment 

While it was stronger than expected, the important monthly Employment report had only a minor impact on mortgage rates.  Against a consensus forecast of 200K, the economy added 227K jobs in February, and revisions to prior months added an additional 61K jobs.  The Unemployment Rate remained at 8.3%, as expected.  Average Hourly Earnings, a proxy for wage growth, increased at a 1.9% annual rate.  With gains above 200K for the first three months of the year, the recent pickup in job growth and the decline in Jobless Claims reflect solid improvement in the labor market.  Overall, the economic data came in pretty close to expectations last week, and Greece successfully reached a debt deal with private bondholders.  With a lack of surprises in the economic news, mortgage rates ended the week with little change.

The big news this week is today’s Fed meeting. Investors will be trying to determine the likelihood of additional Fed easing. The most significant economic data this week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales, Industrial Production, Consumer Sentiment, Import Prices, Philly Fed and Empire State round out a very busy week.


President Obama Announces FHA Refinance Incentive

March 13, 2012 by · Leave a Comment 

President Obama announced a new major FHA change last week that generated a lot of press and has a lot of substance. Home owners who purchased prior to May 31, 2009 using FHA financing will be allowed to refinance at an up-front mortgage insurance (MIP) factor of only .01% and an annual MIP factor of only .55%.  The MIP factors are increasing to 1.75% and 1.25% on April 9th, so this equates to HUGE savings for any eligible home owner.  This is a big deal equating to a savings of $100 a month on a $150k loan!