Initial Jobless Claims Fall While Fed Reminds Economy of Support
Chicago, IL (PRWEB) November 22, 2013 -- Peoples Home Equity sees the yesterdays initial jobless claims data as positive for the economy. In addition, what the Federal Reserve chairman, Ben Shalom Bernanke, mentioned on Tuesday night is further comforting for home buyers.
According to the US Department of Labor on November 21st, Initial jobless claims declined by a surprising -6.1% from 344 to 323k in the week ending November 16th. This was the largest decline seen in initial jobless claims since the end of the first week of September 2013 when claims declined 8.97% from 323k to 294k. This news was very positive for both the equity and housing markets as it signified the strengthening of the US economy.
30-year fixed mortgage rates responded to the news rather oddly as MBA rates moved higher while Freddie Mac rates moved lower. An explanation as to why this Freddies Mac rates declined rather that rose on positive economic data is, as Mortgage News Daily suggest, because “Freddie accepts weekly survey responses from Monday through Wednesday and receives most of those responses earlier in that time window.”
With unemployment trending steadily towards the Federal Reserve’s goal of 6.5%, bankers have been paying more attention to when Fed policy will change. Lenders are watching mortgage rates and Fed policy under a microscope because in the event of a Federal Reserve taper rates are expected to jump. Peoples Home Equity wants readers to know that, contrary to many market commentaries this week, a strengthening labor market does not necessarily mean that the Fed will immediately taper its asset repurchase program upon reach its unemployment goal.
Fed chairman Ben Bernanke gave a speech before the National Economics Club in Washington on Tuesday night and said the following statement regarding the link between the labor market and asset repurchase program as records in a November 19th Washington Post article titled "Bernanke defends central bank’s stimulus program, communications';“So long as inflation remains well behaved, the (Fed) can be patient in seeking assurance that the labor market is sufficiently strong before considering any increase.” Thus, even if unemployment reaches the Fed goal of 6.5%, it does not necessarily mean that Fed policy will immediately change and have a negative effect on interest rates. This news is comforting for prospective home buyers who feel like they are chasing both home prices and mortgage rates higher.
Markets may continue to act as if a Fed policy change is soon imminent, and regardless of price rate action, Peoples Home Equity encourages all prospective home buyers to apply and get pre-approved for a mortgage now. The lender thinks first-time home buyers should be in a position to act fast when a desired home is found or if rates are changing quickly. Right now Peoples Home Equity is offering exclusive mortgage options to first-time home buyers such as a down payment as low as 3.5%.
Contact a Peoples Home Equity loan representative today to discuss, under no obligation, numerous home loan options: (855) 897-0300.
Ornis Mala, Peoples Home Equity, http://www.peopleshomeequity.com, +1 8473386062, [email protected]
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