Monday, March 7, 2011
Rates are going to increase in the not so distant future. Read why!
While investors continued to closely watch the events in the Middle East, there were few new developments there during the week. As a result, this week's important economic data had the greatest influence on mortgage rates. Daily volatility was high as investors reacted to the major economic reports, but mortgage rates ended the week essentially unchanged.
Much stronger than expected economic data during the week caused investors to prepare for the possibility that the economy is growing more rapidly than expected. The Chicago PMI manufacturing index rose to the highest level since July 1988, and the ISM Services index rose to the highest level since August 2005. Weekly Jobless Claims dropped to the lowest level since May 2008. Meanwhile, the Fed's Beige Book reported that many companies were passing through price increases due to rising commodity prices. As expected, mortgage rates reacted to the data by moving higher.
The results from Friday's Employment report were strong, but they did not exceed expectations. Against a consensus forecast for an increase of 200K jobs, the economy added 192K jobs in February. The Unemployment Rate declined to 8.9% from 9.0% in January. The gains were strong nearly across the board, with the exception of the government sector. Over the longer-term, the private sector must produce new jobs to sustain a recovery, so strength in the private sector was a good sign for the future. Average Hourly Earnings, a proxy for wage growth, fell short of expectations, remaining unchanged from January. Some investors were prepared for a much higher jobs number, and the on target results prompted a reversal of the rise in mortgage rates from earlier in the week.
Much stronger than expected economic data during the week caused investors to prepare for the possibility that the economy is growing more rapidly than expected. The Chicago PMI manufacturing index rose to the highest level since July 1988, and the ISM Services index rose to the highest level since August 2005. Weekly Jobless Claims dropped to the lowest level since May 2008. Meanwhile, the Fed's Beige Book reported that many companies were passing through price increases due to rising commodity prices. As expected, mortgage rates reacted to the data by moving higher.
The results from Friday's Employment report were strong, but they did not exceed expectations. Against a consensus forecast for an increase of 200K jobs, the economy added 192K jobs in February. The Unemployment Rate declined to 8.9% from 9.0% in January. The gains were strong nearly across the board, with the exception of the government sector. Over the longer-term, the private sector must produce new jobs to sustain a recovery, so strength in the private sector was a good sign for the future. Average Hourly Earnings, a proxy for wage growth, fell short of expectations, remaining unchanged from January. Some investors were prepared for a much higher jobs number, and the on target results prompted a reversal of the rise in mortgage rates from earlier in the week.
Saturday, March 5, 2011
Wednesday, March 2, 2011
Practice Good Hearth Health: Fireplace Safety Basics
Practice Good Hearth Health: Fireplace Safety Basics
By Charles Furlough Print Article Print Article
RISMEDIA, March 2, 2011—In the winter, there’s nothing as idyllic as sitting by a gently crackling fireplace with a cup of cider or hot cocoa, feeling the warmth from your toes to your soul. The essence of comfort and luxury, a fireplace is the focal point of a home. But, in order to ensure many more years of fireside moments—and to keep something beautiful from becoming potentially dangerous—some regular maintenance is required, as well as a keen eye toward safety.
When most people think of fireplaces, they recall traditional ones, found in older and classic homes. In a traditional fireplace, the fire is encased in a metal firebox lined with special firebrick. Smoke moves up a flue, which is typically a tile or metal liner inside a masonry chimney. A flue damper keeps air from escaping when the fireplace isn’t being used; and the smoke shelf, behind the damper, stops outside air from coming in and pushing harmful smoke into the living area.
Besides traditional fireplaces, though, there are plenty of other types. A heat-circulating fireplace produces some radiant heat, but mainly warms the air that circulates around the firebox; some have a fan that increases the air flow. A gas fireplace is mostly decorative and takes gas logs. By contrast, direct-vent fireplaces are like a wood-burning heat circulator—cool air enters at the bottom, is warmed, and rises out the vent at the top; the CO is expelled out the rear, so there is no need for a chimney. Finally, if you have a modern home or apartment, there’s a good chance you’ll have a modern wood stove—they’re desirable because they’re more efficient that a heat-circulating fireplace.
No matter what type of fireplace you have, maintenance is key to safety. First, before the winter, it’s essential to call in a professional to clean the chimney. Creosote can build up in the chimney and start fires. Typically, as soon as the creosote in the chimney is 1/8-inch thick, that’s an automatic sign to call in a professional who will also check the firebox and masonry and fill in potentially dangerous cracks.
Another important safety note: Chimneys must be lined with metal, or the appropriate tile. Older homes (especially those built before 1950) are typically not. If you have just moved to your home, this is something that a certified home inspector should have found during an inspection; but, if you’re not sure, call in a reputable, professional home inspector to assess the safety of the chimney. The inspector will give input on required repairs you need to have done.
Beyond professional maintenance, it’s essential for the homeowner to take safety precautions too. Here are some of the most important:
-Never burn pine or soft wood; it generally causes extremely fast creosote buildup.
-If you have a wood stove, make sure ashes don’t build up too much. One or two inches of ash is optimal; more than that, and you should remove some.
-Never burn pressure-treated or painted wood; it can cause noxious fumes.
-Never burn any kind of trash—paper, Christmas trees, anything at all—in a wood-burning fireplace. Only use logs made for wood-burning fireplaces.
-Never burn charcoal in a wood-burning fireplace.
-Even though it’s tempting to have as big a fire as possible, never overload a fireplace or wood stove; it can cause restricted air flow and dangerously high levels of combustion.
-Use logs specifically designated for your type of fireplace. If the label on the log’s packaging doesn’t detail this clear enough (which it should), ask a representative at the store you’re buying it from.
-If you have a direct-vent fireplace, make sure that it’s underwritten by Underwriters’ Laboratories (the “UL” symbol will be prominently listed on the packaging) or by the American Gas Association (AGA).
-Play it safe. If anything looks or smells out of the ordinary while you’re operating your fireplace, call a professional for servicing.
Charles Furlough is Vice President of Pillar To Post Professional Home Inspections.
By Charles Furlough Print Article Print Article
RISMEDIA, March 2, 2011—In the winter, there’s nothing as idyllic as sitting by a gently crackling fireplace with a cup of cider or hot cocoa, feeling the warmth from your toes to your soul. The essence of comfort and luxury, a fireplace is the focal point of a home. But, in order to ensure many more years of fireside moments—and to keep something beautiful from becoming potentially dangerous—some regular maintenance is required, as well as a keen eye toward safety.
When most people think of fireplaces, they recall traditional ones, found in older and classic homes. In a traditional fireplace, the fire is encased in a metal firebox lined with special firebrick. Smoke moves up a flue, which is typically a tile or metal liner inside a masonry chimney. A flue damper keeps air from escaping when the fireplace isn’t being used; and the smoke shelf, behind the damper, stops outside air from coming in and pushing harmful smoke into the living area.
Besides traditional fireplaces, though, there are plenty of other types. A heat-circulating fireplace produces some radiant heat, but mainly warms the air that circulates around the firebox; some have a fan that increases the air flow. A gas fireplace is mostly decorative and takes gas logs. By contrast, direct-vent fireplaces are like a wood-burning heat circulator—cool air enters at the bottom, is warmed, and rises out the vent at the top; the CO is expelled out the rear, so there is no need for a chimney. Finally, if you have a modern home or apartment, there’s a good chance you’ll have a modern wood stove—they’re desirable because they’re more efficient that a heat-circulating fireplace.
No matter what type of fireplace you have, maintenance is key to safety. First, before the winter, it’s essential to call in a professional to clean the chimney. Creosote can build up in the chimney and start fires. Typically, as soon as the creosote in the chimney is 1/8-inch thick, that’s an automatic sign to call in a professional who will also check the firebox and masonry and fill in potentially dangerous cracks.
Another important safety note: Chimneys must be lined with metal, or the appropriate tile. Older homes (especially those built before 1950) are typically not. If you have just moved to your home, this is something that a certified home inspector should have found during an inspection; but, if you’re not sure, call in a reputable, professional home inspector to assess the safety of the chimney. The inspector will give input on required repairs you need to have done.
Beyond professional maintenance, it’s essential for the homeowner to take safety precautions too. Here are some of the most important:
-Never burn pine or soft wood; it generally causes extremely fast creosote buildup.
-If you have a wood stove, make sure ashes don’t build up too much. One or two inches of ash is optimal; more than that, and you should remove some.
-Never burn pressure-treated or painted wood; it can cause noxious fumes.
-Never burn any kind of trash—paper, Christmas trees, anything at all—in a wood-burning fireplace. Only use logs made for wood-burning fireplaces.
-Never burn charcoal in a wood-burning fireplace.
-Even though it’s tempting to have as big a fire as possible, never overload a fireplace or wood stove; it can cause restricted air flow and dangerously high levels of combustion.
-Use logs specifically designated for your type of fireplace. If the label on the log’s packaging doesn’t detail this clear enough (which it should), ask a representative at the store you’re buying it from.
-If you have a direct-vent fireplace, make sure that it’s underwritten by Underwriters’ Laboratories (the “UL” symbol will be prominently listed on the packaging) or by the American Gas Association (AGA).
-Play it safe. If anything looks or smells out of the ordinary while you’re operating your fireplace, call a professional for servicing.
Charles Furlough is Vice President of Pillar To Post Professional Home Inspections.
Monday, February 28, 2011
Don't get used to this!
Geopolitical events overshadowed this week's economic data and Treasury auctions. Unrest in the Middle East caused investors to seek relatively safer investments such as bonds. As a result, mortgage rates ended the week lower.
The violence in the Middle East reached a much greater level this week, as Libyan leader Gadhafi fought to retain control. Uncertainty about whether the violence will spread to other nations produced a "flight to safety", which means that investors shifted funds from risky assets such as stocks to relatively safer assets such as bonds. Higher demand for bonds, including mortgage-backed securities (MBS) helped mortgage rates improve.
As a result of the unrest in the Middle East, oil prices climbed to the highest levels since October 2008. When the current crisis eases, oil prices may move lower, but many investors expect that a higher risk premium will remain in the price of oil for quite a while. Higher oil prices impact mortgage rates in two opposing ways, increasing inflation (negative) and slowing economic growth (positive). In the longer term, it's not clear which influence will have a greater impact. Shorter term, there is a risk that the flight to safety trade will reverse as tensions ease, which could push mortgage rates back to higher levels.
Tuesday, February 22, 2011
Press Release - Keller Williams Realty Announces Numbers for 2010, Continued Growth During Real Estate Downturn
AUSTIN, TEXAS (February 21, 2011)–Keller Williams Realty reported today at its national convention that it ended 2010 with 79,315 associates, 701 market centers (offices), and associate profit share up 7.2 percent, with its agents receiving $34.6 million dollars back. Since the inception of the profit sharing program, the company has given back over $304 million in earnings to its agents. Additionally, CEO Mark Willis shared in his annual State of the Company address to more than 8,000 convention attendees that, since the real estate market’s sharp downturn in 2005, the company has grown 30 percent in agents, 40 percent in market centers, 21 percent in closed units and 11 percent in closed GCI.
“Keller Williams agents have outpaced the market in every way, through productivity and profit share. As a company, we are better off now than we were before the shift–and we have our associates to thank for that," said Willis.
The growth of the company can be attributed to the growth of its agents. Agent productivity continued to rise with units closed up 6 percent from December 2009 to 2010, while comparably, the NAR membership as a whole went down in closed units 4.8 percent. Overall the company’s associates saw productivity year on year percentage increases across the board in listings taken (up 13 percent), contracts closed volume (up 9 percent) and contracts closed units (6 percent).
“These numbers are the most important to us because they are proof that our agents are succeeding, making more money and growing their businesses. They are truly breaking through," Willis added.
Willis also did the honors of “turning on" the industry’s firstcomplete lead-to-close business solution, eEdge, during his address. This unique tool is now available to every Keller Williams associate at a fraction of the cost they would normally pay with functionality to build their leads, database and sales. Additionally, with the company-wide paperless transaction system, consumers can expect a faster, more seamless closing process.
“We want to thank our associates and their unwavering commitment to the growth of their businesses and leading the way in the industry in technology," said Mary Tennant, president and COO of Keller Williams Realty. “Keller Williams Realty wouldn’t be forging ahead with such an important product like eEdge without the support of our agents and their vote!"
In addition to reporting positive growth and technological advancement, the company received many accolades in 2010 including:
· Entrepreneur magazine, No. 1 ranked real estate franchise on the 31st Annual Franchise 500 list
· J.D. Power and Associates, highest in overall satisfaction ratings from home buyers among the largest full-service real estate firms for the third year in a row
· Inman News, Co-Founder and Chairman of the Board Gary Keller named one of the 100 Most Influential Leaders in Real Estate
· Training Magazine, highest ranking real estate franchise on the annual Training Top 125, #47 Overall
###
About Keller Williams Realty, Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 690 offices and almost 80,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).
Download printable version
For more information:
Amber Presley
512/327-3070
Email
Press Release - Keller Williams Realty Announces Numbers for 2010, Continued Growth During Real Estate Downturn
“Keller Williams agents have outpaced the market in every way, through productivity and profit share. As a company, we are better off now than we were before the shift–and we have our associates to thank for that," said Willis.
The growth of the company can be attributed to the growth of its agents. Agent productivity continued to rise with units closed up 6 percent from December 2009 to 2010, while comparably, the NAR membership as a whole went down in closed units 4.8 percent. Overall the company’s associates saw productivity year on year percentage increases across the board in listings taken (up 13 percent), contracts closed volume (up 9 percent) and contracts closed units (6 percent).
“These numbers are the most important to us because they are proof that our agents are succeeding, making more money and growing their businesses. They are truly breaking through," Willis added.
Willis also did the honors of “turning on" the industry’s firstcomplete lead-to-close business solution, eEdge, during his address. This unique tool is now available to every Keller Williams associate at a fraction of the cost they would normally pay with functionality to build their leads, database and sales. Additionally, with the company-wide paperless transaction system, consumers can expect a faster, more seamless closing process.
“We want to thank our associates and their unwavering commitment to the growth of their businesses and leading the way in the industry in technology," said Mary Tennant, president and COO of Keller Williams Realty. “Keller Williams Realty wouldn’t be forging ahead with such an important product like eEdge without the support of our agents and their vote!"
In addition to reporting positive growth and technological advancement, the company received many accolades in 2010 including:
· Entrepreneur magazine, No. 1 ranked real estate franchise on the 31st Annual Franchise 500 list
· J.D. Power and Associates, highest in overall satisfaction ratings from home buyers among the largest full-service real estate firms for the third year in a row
· Inman News, Co-Founder and Chairman of the Board Gary Keller named one of the 100 Most Influential Leaders in Real Estate
· Training Magazine, highest ranking real estate franchise on the annual Training Top 125, #47 Overall
 |
| Robin McCoy Realty |
###
About Keller Williams Realty, Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 690 offices and almost 80,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).
Download printable version
For more information:
Amber Presley
512/327-3070
Press Release - Keller Williams Realty Announces Numbers for 2010, Continued Growth During Real Estate Downturn
Thursday, February 17, 2011
New Listing! 2508 Partridge Place
My newest listing is in the Copperwood area of Carrollton. This is a wonderful 4 bedroom home with 2 living areas and formal dining room. Bay windows in both living areas and master bedroom. Very close to the GB Turnpike, Dallas North Tollway, 35E and 121. You really need to see this home!
2508 Partridge Pl
2508 Partridge Pl
Monday, February 14, 2011
Thursday, February 10, 2011
Dallas Housing Stability
Median price: $164,000
Foreclosure rate: 1.72%
As you know, Texas cities have been among the nation's most stable housing markets, boasting very affordable prices, continued new development and little price volatility. The economy has helped: The city's unemployment rate is about a point below the national average, as is the state's.
Another key to Dallas's housing market strength is its expanding population. The metro area added nearly 150,000 people between July 2008 and July 2009, more than any other place in the nation. That means development on the many open areas not far from town has continued. Home prices have fallen less than 10% since 2006, and the median price of $164,000 makes homeownership a reasonable expectation for most working people.
Wednesday, February 9, 2011
4.875% 30yr Fixed, 4.25% 15yr Fixed both with 1% Origination
Inflation concerns hit bond markets this week. Despite soothing comments from Fed Chief Bernanke, stronger than expected economic growth and higher commodity prices raised investor fears that future inflation may increase. As a result, mortgage rates moved higher during the week.
Global economic growth has been picking up, particularly in developing countries, which has increased the demand for commodities. Many developing countries already have had to deal with rising inflation, and readings in Europe have moved higher recently as well. In the US, Fed officials tend to focus on core inflation (which excludes food and energy), and these measures have been extremely low. According to Bernanke, slow wage growth and slack in the US economy will help keep core inflation in the US low for quite a while. This has allowed Fed officials to keep monetary policy loose to boost the economy. Investors, though, have grown more concerned about the risk that the Fed's stimulative policies will lead to significantly higher long-term inflation.
While the headline number fell short, this week's Employment report was considered to be positive overall, and mortgage rates moved higher after the news. Against a consensus forecast of 140K, the economy added just 36K jobs in January. The Unemployment Rate was expected to increase to 9.5% from 9.4% in December. Instead, it dropped to 9.0%, the lowest level since April 2009. Economists suggest that a number of factors were responsible for the divergence between the two sets of data. First, bad weather distorted the results in many regions. Second, the Unemployment Rate reflects both smaller companies and larger companies, while the payrolls data captures only larger companies. Finally, the January data tends to be the least reliable month of the year. After examining the details, investors placed more weight on the growth in jobs among the small businesses and self-employed, and they expect the payrolls data to "catch up" in future months.
Global economic growth has been picking up, particularly in developing countries, which has increased the demand for commodities. Many developing countries already have had to deal with rising inflation, and readings in Europe have moved higher recently as well. In the US, Fed officials tend to focus on core inflation (which excludes food and energy), and these measures have been extremely low. According to Bernanke, slow wage growth and slack in the US economy will help keep core inflation in the US low for quite a while. This has allowed Fed officials to keep monetary policy loose to boost the economy. Investors, though, have grown more concerned about the risk that the Fed's stimulative policies will lead to significantly higher long-term inflation.
While the headline number fell short, this week's Employment report was considered to be positive overall, and mortgage rates moved higher after the news. Against a consensus forecast of 140K, the economy added just 36K jobs in January. The Unemployment Rate was expected to increase to 9.5% from 9.4% in December. Instead, it dropped to 9.0%, the lowest level since April 2009. Economists suggest that a number of factors were responsible for the divergence between the two sets of data. First, bad weather distorted the results in many regions. Second, the Unemployment Rate reflects both smaller companies and larger companies, while the payrolls data captures only larger companies. Finally, the January data tends to be the least reliable month of the year. After examining the details, investors placed more weight on the growth in jobs among the small businesses and self-employed, and they expect the payrolls data to "catch up" in future months.
Christian Johnson--Shelter MortgageTuesday, February 8, 2011
This Month in Real Estate February 2011
While the national numbers say that home purchases go down in the winter months, this doesn't mean that YOUR home won't sell in February and March. Many sellers wait until spring flooding the market with competition for YOUR home. List now and avoid the rush.
Sunday, February 6, 2011
289 Aqua Marine Dr
Here is my newest listing. It is in Oak Point, TX which is a growing community tucked in between Denton and Little Elm. As you drive in you feel the expanse of land and nature giving the sensation of being out in the country. But you are only 15 minutes from the University of North Texas in Denton, 20 minutes from Lewisville, and 30 minutes from Plano.
This house has 4 bedrooms, 3 baths, a study, formal dining, pool, koi pond, deck w/spa, balcony off the master bedroom...oh and it sits on an acre of mature trees + a creek. Absolutely stunning!
289 Aqua Marine Dr
This house has 4 bedrooms, 3 baths, a study, formal dining, pool, koi pond, deck w/spa, balcony off the master bedroom...oh and it sits on an acre of mature trees + a creek. Absolutely stunning!
289 Aqua Marine Dr
Tuesday, February 1, 2011
Featured Property of the Week--Lakewood
A beautiful home in desirable Lakewood. Hop, skip and a jump to White Rock Lake and 2 city parks. 4 Bedrooms, Pool, Spa...
Guide to Lakewood
Guide to Lakewood
Weekly Mortgage Update: 30yr Fixed 4.75%, and 15yr Fixed 4.125% both with 1% Origination Fee
WOW, Look at that 15yr note @ 4.125%!!!!!
A week packed with potentially big market moving economic events turned out to be relatively quiet for mortgage rates. There were no major surprises from the Fed meeting, and the economic data was mixed compared to expectations. Strong demand for this week's Treasury auctions offset concerns about higher food and energy prices, leaving mortgage rates nearly unchanged from last week.
The biggest economic report released during the week was for Gross Domestic Product (GDP), the broadest measure of economic growth. Fourth quarter 2010 GDP increased 3.2%, up from a level of 2.6% in the third quarter. For all of last year, the economy grew 2.9%, the highest level since 2005. Notably, government spending declined during the fourth quarter, while consumer spending picked up significantly. Government stimulus programs have boosted the economy during the past couple of years, but in the long-term it's the performance of the private sector that will largely determine the strength of the economy. Economists expect consumer spending and business investment to remain healthy this year, and the consensus forecast for 2011 is for GDP growth of 3.2%. This level of growth would be consistent with a gradual decline in the unemployment rate.
The housing sector data released during the work was encouraging. December New Home Sales jumped 18% to the highest level in eight months (Largest since the Tax Credit Incentive). The inventory of new homes on the market fell to a 6.9-month supply (A BALANCED market). December Pending Home Sales, a leading indicator of housing market performance, rose 2% from November, the fifth increase in the last six months. According to the National Association of Realtors (NAR), "modest gains" in the labor market have helped buyers during a period of favorable home affordability levels.
The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month.
A week packed with potentially big market moving economic events turned out to be relatively quiet for mortgage rates. There were no major surprises from the Fed meeting, and the economic data was mixed compared to expectations. Strong demand for this week's Treasury auctions offset concerns about higher food and energy prices, leaving mortgage rates nearly unchanged from last week.
The biggest economic report released during the week was for Gross Domestic Product (GDP), the broadest measure of economic growth. Fourth quarter 2010 GDP increased 3.2%, up from a level of 2.6% in the third quarter. For all of last year, the economy grew 2.9%, the highest level since 2005. Notably, government spending declined during the fourth quarter, while consumer spending picked up significantly. Government stimulus programs have boosted the economy during the past couple of years, but in the long-term it's the performance of the private sector that will largely determine the strength of the economy. Economists expect consumer spending and business investment to remain healthy this year, and the consensus forecast for 2011 is for GDP growth of 3.2%. This level of growth would be consistent with a gradual decline in the unemployment rate.
The housing sector data released during the work was encouraging. December New Home Sales jumped 18% to the highest level in eight months (Largest since the Tax Credit Incentive). The inventory of new homes on the market fell to a 6.9-month supply (A BALANCED market). December Pending Home Sales, a leading indicator of housing market performance, rose 2% from November, the fifth increase in the last six months. According to the National Association of Realtors (NAR), "modest gains" in the labor market have helped buyers during a period of favorable home affordability levels.
The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month.
Monday, January 10, 2011
Weekly Mortgage Update: 30yr Fixed 4.75%, 15yr Fixed 4.25% BOTH with NO Origination
The volatility in mortgage rates continued during the first week of the year. Prior to Friday's Employment report, nearly all the economic data was stronger than expected, which was negative for mortgage rates. Rates improved after the Employment data, though, and ended the week nearly unchanged.
Over the last two months of 2010, investors began to focus on a trend toward stronger economic growth, which helped push mortgage rates higher over that period. Nearly every economic report released this week showed greater than expected improvement from last month, including Services, Manufacturing, and Construction. Stronger economic growth and job creation is positive for home sales, but it also results in higher inflation, which leads to higher mortgage rates.
The condition of the labor market is among the most important economic data every month, and this week there was some additional suspense. On Wednesday, ADP, a private payrolls firm, released its forecast for private sector job growth in December, and it was for an increase of an enormous 300K jobs. The ADP forecast has always been considered an imprecise labor market predictor, but the sheer magnitude of the ADP forecast caused many investors to increase their expectations for the government's monthly Employment report. Friday's data showed that the economy added 103K jobs in December, and revisions to prior months added an additional 70K jobs. The combined total of 173K jobs was close to the original consensus estimate, but was below the number that some investors expected after the ADP forecast, and mortgage rates improved after the news. Another big surprise came from a drop in the Unemployment Rate to 9.4% from 9.8% in November, far below the consensus forecast of 9.7%, and the lowest level in 19 months. Economists suggest that seasonal factors may have played some role in the large decline in the Unemployment Rate, so next month's results will be highly anticipated.
Over the last two months of 2010, investors began to focus on a trend toward stronger economic growth, which helped push mortgage rates higher over that period. Nearly every economic report released this week showed greater than expected improvement from last month, including Services, Manufacturing, and Construction. Stronger economic growth and job creation is positive for home sales, but it also results in higher inflation, which leads to higher mortgage rates.
The condition of the labor market is among the most important economic data every month, and this week there was some additional suspense. On Wednesday, ADP, a private payrolls firm, released its forecast for private sector job growth in December, and it was for an increase of an enormous 300K jobs. The ADP forecast has always been considered an imprecise labor market predictor, but the sheer magnitude of the ADP forecast caused many investors to increase their expectations for the government's monthly Employment report. Friday's data showed that the economy added 103K jobs in December, and revisions to prior months added an additional 70K jobs. The combined total of 173K jobs was close to the original consensus estimate, but was below the number that some investors expected after the ADP forecast, and mortgage rates improved after the news. Another big surprise came from a drop in the Unemployment Rate to 9.4% from 9.8% in November, far below the consensus forecast of 9.7%, and the lowest level in 19 months. Economists suggest that seasonal factors may have played some role in the large decline in the Unemployment Rate, so next month's results will be highly anticipated.
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