I am recommending locking into rates for short term transactions, as prices not only stalled today, but also dropped. The jobs report was not released due to the government shutdown, so there was no catalyst to move prices. The 4% Bond fell by 16bp to end the week at 104.94, up just a meager 10bp for the week. The Dow gained 76.10 points to 15,072.58, the S&P 500 rose by 11.84 points to 1,690.50 while the Nasdaq was up 33.41 points to end at 3,807.75. Oil was last seen at $103.62/barrel up 31 cents.
The National Average 30 Year Fixed Rate reported by Freddie Mac on Oct 3rd, was 4.22% with 0.70 points and the 15 Year Fixed Rate was 3.29% with 0.70 points.
Fed Gevernor Rosengren says taper can happen when Fed has compelling evidence of recovery – sees very slow removal accommodation over several years. Read more
Housing News
First-time homebuyers sidelined by financial challenges
By most accounts, this year is shaping up to be a positive one for housing, with prices, sales and construction numbers consistently on the rise. However, there is a catch. Investors may be buying homes — along with some homeowners — but the overall homeownership rate among Americans continues to fall behind historic homeownership levels. In fact, the homeownership rate declined for the fifth consecutive year in a row, reaching 63.9%, according to the Census Bureau’s latest American Community Survey. Read more
Economic News
U.S. Default
The government shutdown will soon take a backseat to the looming October 17 deadline for the debt ceiling. Yesterday, the U.S. Treasury put out the following statement: “In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth—with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression.”
Strong words from the Treasury. Speaker of the House John Boehner pledged to avoid a default and would use a combination of Republican and Democratic votes to increase the debt limit if necessary.
Jobs- ADP reported private employers added 166K jobs in September, below the 170K expected. August revised lower to 159K from 176K.
Jobless claims inch higher; mired at pre-recession levels
The number of Americans filing new claims for jobless benefits edged higher last week but remained at pre-recession levels, a signal of growing strength in the labor market. Initial claims for state unemployment benefits rose 1,000 to a seasonally adjusted 308,000, the Labor Department said on Thursday. Read more
Sources: Bloomberg, CNBC, MMG, Housingwire, KCM, Reuters