Unemployment Rates Drop But Skepticism Remains

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Peoples Home Equity comments on the latest initial jobless claims and unemployment rate info relating to housing.

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The unemployment rate dropped a magnificent .3% in December; the largest monthly decline seen in the past 10 years of data down on the U.S. Bureau of Labor Statistics website.

Peoples Home Equity was content to see the unemployment report post at just 6.7% on Friday, January 10th. While the rate news was very positive for the housing market, skepticism remains over how well the labor market truly improved due to the amount of individuals dropped from the labor force in the December.

The unemployment rate dropped a magnificent 0.3% in December; the largest monthly decline seen in the past 10 years of data shown on the U.S. Bureau of Labor Statistics website. The news came after already positive news on Thursday, January 9th that initial jobless claims declined more than expected ending the week -4.37% lower than the previous week.

Meanwhile 347,000 thousand Americans were dropped from the labor force last month. The unaccounted for individuals not included in the unemployment report is viewed as deceptive in the eyes of skeptics of the unemployment rate. Peoples Home Equity was not expecting to see such a quick drop in the unemployment rate so soon. Accordingly, the lender believes the Federal Reserve will further taper its long lasting quantitative easing program soon. Such an event will most likely push interest rates, and thus mortgage rates to new highs. One must remember that interest rates have been subdued for an extended period of time. With stock market indices at news highs and major large banks re-capitalized, the Federal Reserve is definitely looking to end its QE3 policy when possible. In addition, since the unemployment rate is fast approaching 6.5% the Federal Reserve may initiate a rate hike further fueling interest rates/mortgage rates to move higher. Thus, Peoples Home Equity strongly encourages all home buyers to hedge themselves against higher mortgage rates and apply for a home loan now. With property values are increasing the last thing home buyers want to do is pay a larger mortgage payment.

Applying for a home loan on the Peoples Home Equity website is easy, and there are multiple links offering mortgage calculators to answer a user’s individual finance questions.

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

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Giorgio U Ferrero
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