Shelter Six:  Wages Continue to Rise

March 11, 2019 by · Leave a Comment 

February Wage Growth reached the highest level since April 2009 as average hourly earnings were up 3.2% from January and 3.4% from a year ago.  Rising incomes are always good for home sales.

The Unemployment Rate declined from 4% to 3.8%, with much of the reduction due to workers returning to the workforce after the end of the government shutdown.

The economy added just 20K jobs in February, well less than expected with much of the shortfall attributed to poor weather across the country.

The Chief Economist for Freddie Mac, Len Kiefer, recently shared his viewpoint that although home prices have risen greatly, we are not in a housing bubble similar to 2008.

Kiefer emphasized that the market is not driven by the speculative mortgage products that existed in 2008 nor is today’s mortgage default potential very high.

Kiefer predicts the economy will experience modest growth in ‘19, mortgage rates will gradually rise capping at 5%, and home prices will moderate substantially over the next few years.

Rate Update

Mortgage rates slipped last week on news that the European Central Bank sharply reduced the economic outlook for Europe while announcing some new stimulus programs.

This Week

Retail Sales will be released on Monday, the Consumer Price Index on Tuesday, and Durable Orders on Wednesday.  Investors also will be watching for signs of progress in the trade talks between the U.S. and China.