Initial Jobless Claims And Weekly Mortgage Applications Shows Disappointing Week

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Peoples Home Equity asserts its disappointment in both today's initial jobless claim and weekly mortgage application reports.

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The total number of claims now stands at 379,000, which is 24.2% higher than 2 weeks ago!

Peoples Home Equity was surprised to see a continued increased in today’s initial jobless claims report which showed a rise for the second consecutive week. The report was adversely reflective of a growing economy which has led the Federal Reserve to cut its successful quantitative easing program. The reality is job conditions as well as mortgage applications remain volatile.

Peoples Home Equity was very surprised by the increase in initial jobless claims ending the week of December 13th. The lender had mentioned in a December 12th release just after the last jobless claim report that it “expects the numbers to resume their downtrend”. Instead of a resumed downtrend, initial claims increased 2.71%, or few by 10,000 from the week ending December 6th to December 13th, as shown on TradingEconomics.com. The total number of claims now stands at 379,000, which is 24.2% higher than 2 weeks ago! Of the past 24 weeks, including today’s report, there have been 14 initial claims announcements (58.3%) that have shown declines. Peoples Home Equity is expecting a decline in claims to soon resume.

The Federal Reserve is also watching initial jobless claims closely as its goal is to decrease the national unemployment rate to 6.5%. The Fed is trying to reach this goal in an effort to stop using its expensive asset repurchase program (QE3)to prop up the U.S. economy. The Feds policy related to jobs is very important to Peoples Home Equity because once QE3 ends interest rates, and thus mortgages rates, are expected to rise dramatically in a short period of time. We are already seeing mortgage rates resume their climb near annual highs due to the Fed stating yesterday, December 17th that it will now begin tapering its QE3 policy from $85 billion/month to just $75 billion.

Another data point released today, while much less surprising, was that of the Mortgage Bankers Association weekly mortgage application survey, which fell to a multi-year low. Weekly mortgage applications fell 5.5% to a low of 374.6 ending the week of December 13th. Weekly mortgage applications have now fallen 6 times in the past 7 reports. Home buyers should use this opportunity to apply for a home loan now. Initial jobless claims will resume their decline, weekly mortgage applications will increase due to housing demand from increased employment, and the Fed will continues to taper its QE3 program. Due to this future economic prospect, Peoples Home Equity encourages home buyers to apply for a mortgage now before it becomes too expensive!

Please contact Peoples Home Equity loan officer today for HARP loan details at: (855)-897-0300

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Ornis Mala
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