The stock market in this Market Update April 4 Edition has shown signs of life and growth. The large jumps and drops we have all become so accustomed to lately have subsided for the time being and that creates confidence in the economy. The lack of any significant economic news or world events has investors enjoying trading stability.
As is normal, the first week of the month is when the employment data is released. On Wednesday the ADP report was released and they estimated private payrolls to have increased a strong 191,000. This follows an upwardly revised 178,000 from the prior month. Although the ADP report does carry some weight with investor behavior, all eyes for the week remained on the Labor Department’s employment report released on Friday.
At 8:30 a.m. on Friday the Labor Department reported that the labor force hit a milestone in the month of March. The March employment report showed an addition of 192,000 jobs. This marks the first time since the Great Recession that the labor force has returned to the peak numbers of employed which occurred back in 2008. Essentially what is being stated is that all of the private sector jobs lost in the recession have been recovered back into the labor force. The unemployment rate remained steady at 6.7%. Despite this past winter being one of the harshest on record, the unemployment rate did not appear to be significantly impacted.
Last week’s newsletter carried a lot of data regarding housing which left this Market Update April 4 Edition absent of any major market moving housing reports. However, as always there is something happening in real estate and a report to be found. The Mortgage Bankers Association announced on Wednesday that purchase applications increased a minor 1.0 percent in the prior week. Any increase is welcome however applications for purchases are still 17 percent below the same time last year. Mortgage rates have been creeping up ever so slowly and the increase does effect refinance applications. The MBA report showed applications for refinances declined by 3.0 percent.
In February, spending for new construction edged up 0,1 percent following a decline of 0.2 percent in January. The strength in the report comes from the private nonresidential area of the market. Spending for private residential construction declined 0.8 percent following a boost in January of 1.3 percent. The one real positive to the report is that overall construction spending is 8.7 percent higher than a year ago.
The biggest challenge facing the housing market today is the limited inventory available. There is absolutely no shortage of homebuyers searching for homes. The challenge they face is locating a home as homeowners still remain very slow to place their homes on the market for sale. There has been an upswing in recent weeks, but not quite as much as is typical for the start of the spring market.
Next week the potential market reports are:
• Wednesday April 9th – MBA Applications and FOMC Minutes
• Thursday April 10th – First Time Jobless Claims
• Friday April 11th – Producer Price Index
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (626) 486-1775.
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Waleed Delawari is one of Pasadena’s leading mortgage professionals. Since opening his own brokerage firm in 2001, Waleed has successfully closed over one billion dollars in mortgage loans and successfully helped thousands of borrowers purchasing Pasadena Real Estate.
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