Author Archive
Inflation Update: Cost of Living Rising as Wage Growth Lags
Posted by: | CommentsPosted To: MBS Commentary
The Bureau of Labor Statistics has released the Consumer Price Index for February 2011. The CPI is the most widely relied upon measure of inflation. Prices for the goods and services used to calculate the CPI are collected in 87 urban areas throughout the country and from about 23,000 retail and service establishments. Data on rents are collected from about 50,000 landlords or tenants. As a means for adjusting income payments. Over 2 million workers are covered by collective bargaining agreements which tie wages to the CPI. The index affects the income of almost 80 million people as a result of statutory action: 47.8 million Social Security beneficiaries, about 4.1 million military and Federal Civil Service retirees and survivors, and about 22.4 million food stamp recipients. Changes in the…(read more)
Mortgage Rates: Best Ex Barrier Broken. Briefly?
Posted by: | CommentsPosted To: Mortgage Rate Watch
Mortgage rates improved today as the situation in Japan deteriorated and a feeling of panic poured through global markets, spurring on another flight to safety in risk-averse government bonds. A flight to safety happens when investors are nervous about owning risky assets like stocks, but do not want to miss out on earning a return on their funds, so they allocate their money into risk-free government guaranteed U.S Treasury debt to provide a safe-haven AND an investment return. As benchmark Treasury yields fall on “flight to safety” buyer demand, prices of mortgage-backed securities move higher in unison. This allows lenders to reprice their rate sheets for the better and gives originators an opportunity to offer fence-sitting borrowers lower mortgage rates or more competitive closing costs…(read more)
Residential Construction at Record Low. New Home Sales to Suffer
Posted by: | CommentsPosted To: MND NewsWire
The U.S. Census Bureau and the Department of Housing and Urban Development have released New Residential Construction statistics for February 2011. Housing Starts data estimates how much new residential real estate construction occurred in the previous month. New construction means digging has begun. Adding rooms or renovating old ones does not count, the builder must be constructing a new home (can be on old foundation if re-building). Although the report offers up single family housing, 2-4 unit housing, and 5-unit and above housing data, single family housing is by far the most important as it accounts for 70-80% of total home building (which might be shifting more toward multi-family in the years ahead). Building Permits data provides an estimate on the number of homes planning on being…(read more)