Real Estate & Market Report: November 06, 2015 – On Wednesday ADP called for an increase of 182,000 jobs in the private sector for the month of October.

• On Friday the Labor Department announced that new job creation for the month was actually 271,000 blowing past virtually all expectations.
• The unemployment rate fell to 5.0 percent.
• Although not a guarantee, it is likely that this jump in hiring will figure in significantly increasing the odds of a December rate hike by the Fed.

The stock market for the week has been trading in a relatively narrow range because most major economic reports delivered little news that surprised investors other than Friday’sunemployment data.

• The immediate market reaction after the labor department’s announcement was for bond yields to soar which means mortgage rates will jump.

It is typically in the labor report, even when the top line jobs number is strong, that there are weaknesses buried within it that will indicate not everything in the employment sector is rosy.

• Today’s report bucked the trend with the underlying data, such as wage growth and average hours worked, showing positive employment trends.

On Wednesday Fed Chair Janet Yellen alluded to the fact that there is a stronger possibility that the Fed will move on interest rates at the December FOMC meeting by using the words that a rate increase could be a “live possibility”.

• She did however emphasize that there is no commitment to change monetary policy.
• Of course, as is expected, the announcement came with the typical caveat that theFed will have to look at the latest economic reports to make their final decision.
• Friday’s employment report seems to make it highly likely that the Fed will move rates.

The recent rise in mortgage rates even prior to this latest announcement from the Fed has pushed mortgage applications slightly lower.

• According to the Mortgage Bankers Association of America purchase and refinance applications both declined by 1.0 percent for the week ending October 30th.
• Applications for refinances are 4.0 percent than the same time last year.
• Purchase applications, which are reflective of the strong housing recovery, are 20 percent from a year ago.

Construction spending in residential real estate continues to remain strong with a jump of 1.7 percent and a year on year gain of 17.1 percent.

• New multi-family construction also continues to remain very strong with a rise of 4.9 percent for the month.
• From the same time last year, multi-family construction is 26.7 percent higher.

Next week’s potential market moving reports are:

• Thursday November 12th – First Time Jobless Claims
• Friday November 6th – Producer Price Index & Retail Sales

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 feel free to reach me at (661) 505-4300.