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Jobless
Claims Fall
An
improving US economic outlook was negative for mortgage rates this week.
Reduced concerns about Europe also caused a partial reversal in the flight
to safety trade. As a result, mortgage rates ended the week higher.
Early in
the month, the December Employment report showed a larger than expected
increase of 200K jobs, and the Unemployment Rate continued to move lower.
This week, Weekly Jobless Claims fell to the lowest level since April 2008.
The labor market is one of the most important factors in the health of the
economy, and many investors now view the outlook as brighter than it has
been since the financial crisis began. If this is the case, it will be
great news for the economy, and job gains will increase the willingness and
the ability of people to purchase homes.
The
Housing sector data released this week was encouraging as well. January
Existing Home Sales increased 5%, while the inventory of unsold homes
declined 9%, to the lowest level since March 2005. December Housing Starts
for single-family units increased 4%, and Building Permits for
single-family units rose 2%. Finally, the January NAHB Home Builder
confidence index rose for a fourth consecutive month to the highest level
since 2007. Improving economic conditions, high affordability levels, and
low mortgage rates provide solid reasons to be optimistic about the housing
market.
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