|For the Week Ending March 9, 2018|
The Stock Market and Economic Policy:
In a week where the was not much economic data that rattled investors, there were certainly enough political upheavals to scare investors. Depending on which day it is, one day investors are concerned about the Tariff’s President Trump wants to impose on steel and aluminum, and the next day they don’t seem to care.
Gary Cohn, Trump’s top economic advisor, resigned this week from the White House. Because of a significant disagreement regarding Trump’s plans for tariffs, Cohn felt he could not longer work with the President. This sent a scare through the markets, as it never breeds stability when a main player in the White House resigns, let alone someone is very much in touch and responsible for economic changes and policies instituted by the President.
On Thursday President Trump followed through on his promise to impose tariffs on aluminum and steel imports. He softened his stance somewhat when he made provisions for Canada and Mexico to be exempt from the tariffs.
As much as many government officials, both Democrat and Republican, disagree with this approach to fixing the trade deficit, only time will tell how other countries will respond against the U.S. There are some that believe the President is doing this to bring
ADP reported a stronger than expected employment report for this coming Friday. They are predicting an increase in private payrolls by 235,000. This is well above Econoday’s high estimate. ADP predictions have been on the high side of government data in recent months, but they have been closer than in years past, in which they had virtually lost all credibility in their predictions. ADP regained some credibility with last months estimates in which they were within 10,000 of the labor department’s report.
Mortgage rates continue to move higher which is being felt in the numbers of mortgage loan applications for home purchases. For the week of March 2nd, purchase applications declined by 1.0 percent. Refinances actually increased by 2.0 percent, which is rather surprising. Applications for refinance are down to only 41.8 percent of total residential mortgage activity. You may recall that for many years, refinances were well over 50 percent of all mortgage activity
Next week’s potential market moving reports are:
• Tuesday March 13th – Consumer Price Index
As your mortgage and real estate 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 enjoy this quick update on what happened this week in the housing and financial markets.
|President Trump’s proposed tariffs continue to spark talk of a trade war. This has caused uncertainty in markets, helping stabilize rates in the near term.|
|Although jobless claims last week came in higher than expected, the labor market remains strong, supporting a likely Fed policy rate increase this month.|
|The European Central Bank has shown confidence in the overseas economy and inflation. A strong global economy can pressure mortgage rates higher this year.|
|New home prices are likely to be pushed higher as builder costs increase. Lumber prices are up 25% over the same time last year.|
|Homebuyers are demanding more from their homes. A 2-car garage, granite countertops, and walk-in closet are now often cited as “essential” home features.|
|New tariffs on steel could drive up the cost of building apartment buildings and condos. Single-family homes, made of wood, are less likely to be affected.|
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Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
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