Blog posted On November 09, 2018
This year’s Midterm Elections boasted record turnouts, breaking the record set in 1966. No significant mortgage rate movement this week, as the Federal Open Market Committee voted to leave the benchmark interest rate unchanged. Job openings slipped slightly but continue to outnumber unemployment reports. Mortgage application submissions declined.
After setting an all-time high in August, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed job openings declined in September to a level of 7.009 million. Job openings far exceed the 6.1 million Americans who are currently unemployed. The voluntary quit rate was unchanged at a rate of 2.7%. Approximately 5.7 million people were hired and 5.7 million people were laid off or fired, keeping the labor market balanced. The labor market is experiencing its largest expansion in decades. The unemployment rate sits at a 48-year low of 3.7%.
The Mortgage Bankers Association (MBA) weekly mortgage application survey declined during the week ending 11/2, down a composite 4.0%. New purchase application submissions dropped 5.0% and refinance application submissions are down 3.0%. MBA's associate vice president of economic and industry forecasts, Joel Kan, explained rising rates are due to the robust jobs market and record employment numbers. He stated, “Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October.”
The Federal Open Market Committee met on Wednesday and Thursday of this week, and as expected voted to leave the benchmark interest rate unchanged. Analysts read the Fed’s post-meeting statement as slightly hawkish and are expecting an additional interest rate hike this year. However, the word “gradual” was retained, suggesting policy decisions will remain incremental.
The current labor market is the strongest it has been in decades. Wage growth has been sluggish, but last week’s employment data suggests it is starting to pick up. A strong labor market will typically translate into a busy housing market. If you’re looking to buy a home in today’s market, get preapproved before you start shopping. With multiple buyers looking at the same listings, mortgage preapproval could mean the difference between getting your offer accepted or passed on.