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Jobless claims duck under 300K for 3rd straight week

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WASHINGTON (3/27/15)--Initial claims for unemployment fell by 9,000 to 282,000 for the week ending March 21, according to numbers released by the Department of Labor Thursday.

The drop, which pushes the decline over the last three weeks to 43,000, marks the third consecutive week claims have come in under 300,000 ( March 26).

"This is welcome news as the February economic data have disappointed," said Ryan Sweet, Moody's analyst ( ). "Our tracking estimate of first quarter GDP is only 1% at an annual rate."

The four-week moving average for jobless claims fell by 7,750 for the week to 297,000, the second decline in the last three weeks. A four-week moving average below 300,000 is historically rare, Sweet said.

Continuing claims, meanwhile, or those who filed for unemployment benefits for at least a second straight week, fell by 6,000 to 2.416 million, according to the numbers.

Though, the four-week moving average climbed by 3,000, leaving the possibility open that the unemployment rate could rise by the end of March, Moody's said.

The insured unemployment rate, at 1.8%, did not change during the week, and sits 0.3% down on a year-over-year basis.

"There are some temporary factors hurting growth this quarter, including weather and the West Coast port disruptions," Sweet said. "The good news is that claims suggest the economy has gained some momentum heading into the second quarter."

Refis drive up mid-March mortgage apps: MBA

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WASHINGTON (3/26/15)--Mortgage application activity perked up last week as the composite index for the Mortgage Bankers Association's mortgage application survey jumped 9.5% after a nearly 4% drop the prior week ( March 25).

Refinance applications, which climbed 12.3% for the week, spurred the resurgence. Though, the purchase index also marched higher by 4.9% after falling last week as well.

"Last week brought positive news regarding mortgage application activity, as both purchase and refinance applications advanced during the week ending March 20," said Michael McGrane, Moody's analyst ( "Lower mortgage rates likely fueled much of the gain in refinance activity, but this will prove fleeting as the economy heats up and the Fed's first interest rate hike since 2006 comes into focus."

The four-week moving average for refinance applications has fallen 24.2% over the past month, but remains 19.7% higher on an annual basis. Refinancings comprised 60.5% of all applications for the week ending March 20.

Purchase applications have dropped by 3.4% over the past month, but remain 1.5% above their year-over-year pace.

As for mortgage rates, the 30-year fixed-rate mortgage rate fell by 9 basis points during the week to 3.9%, which is 9 basis points lower on a monthly basis and 66 basis points lower on an annual basis.

For 30-year fixed-rate jumbo mortgages, rates fell 5 basis points to 3.89%. The five-year adjustable-rate mortgage rate fell by 2 basis points as well.

With energy prices on mend, CPI ticks up in Feb.

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WASHINGTON (3/25/15)--The consumer price index (CPI) climbed 0.2% in February, the first increase in four months, according to numbers released by the Bureau of Labor Statistics Tuesday ( March 24).

Energy prices began to stabilize during the month after plunging in both December and January, which helped redirect overall prices into positive territory.

Specifically, fuel oil prices climbed by 1.9% after a 9.9% tumble in January, and the gasoline CPI rose 2.4% in February after dropping by 18.7% the prior month.

"Lower oil prices' mark on the U.S. consumer price index is fading," said Ryan Sweet, Moody's analyst ( ).

Though it could take longer than expected for oil prices to resume climbing, which, when combined with an appreciating U.S. dollar, could continue to suppress inflation, Sweet added.

The core CPI climbed by 0.2% for the month. Core CPI excludes energy and food, which rose by 0.2%.

Further, used cars and trucks saw healthy price increases for the first time since December 2013, jumping 1% in February, while new-car prices increased 0.2%.

Shelter, or the price of housing also rose, climbing 0.2% on a monthly basis in February and 3% on an annual basis.

Existing-home sales, price growth rebound in Feb.

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WASHINGTON (3/24/15)--After January's slump, existing-home sales picked back up in February, climbing 1.2% for the month and 4.7% on a year-over-year basis, according to numbers released by the National Association of Realtors (NAR) Monday ( March 23).

Single-family home sales drove the gains, which were below analyst forecasts, while condo and co-op sales were unchanged.

"The U.S. housing market is still subdued, showing few signs of acceleration despite February's uptick in sales," said Andres Carbacho-Burgos, Moody's analyst ( ). "Total sales volume for existing homes has been flat for over a year now as investor and second-home purchases have dried out" and not been replaced by first-time homebuyers. 

By region, single-family home sales fell in the Northeast by 5.8%, remained flat in the Midwest, climbed in the South by 1.1% and rose in the West by 7.7%.

Further, sales accelerated on a year-over-year basis in all regions, with the South leading the way at 7.5%. The West posted the weakest annual sales growth at 3.2%.

Median home prices continued to climb as well, with single-family homes experiencing the highest rate of acceleration.

The median sales price for single-family homes was $204,200 in February, an 8.2% increase on an annual basis.

"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels," said Lawrence Yun, NAR chief economist. "Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise."

Rising home values aren't lifting underwater owners: Zillow

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SEATTLE (3/23/15)--Despite much of the housing market seeing steady home-price appreciation recently, the national negative equity rate has largely remained unchanged, according to Zillow's negative equity report from the fourth quarter.

The reason: home-price increases have not trickled down to the lowest-priced homes, which are the most likely to be underwater ( March 20).

In the fourth quarter, the report found, the negative equity rate deteriorated in 21 of the top 50 U.S. markets, while nationally home values climbed 6% on an annual basis.

"Higher negative equity rates have become the new normal," said Stan Humphries, Zillow chief economist. "We've long been expecting the negative equity rate to fall more slowly as home value growth also slows, and unfortunately that's exactly what we're seeing.

"Compounding the problem is the fact that negative equity is decidedly not an equal opportunity predator, and looms larger over the bottom 10% of homes, where homeowners are least prepared to withstand the assault."

In Atlanta, for example, 49% of homes in the bottom-third of home values have fallen into negative equity, compared with 11% of homes in the top-third.

On a national basis, 16.9% of all homes with a mortgage are in negative equity; a number expected to fall to 15.4% by the end of 2015.

Among large U.S. metros, Virginia Beach (28.3%), Jacksonville (27%), Las Vegas (26.4%) and Atlanta (26.1%) experienced the highest rates of negative equity in the fourth quarter.

Freddie Mac rate drop adds to housing market's mixed signals

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WASHINGTON (3/20/15)--The average 30-year fixed-rate mortgage rate fell to 3.78% from 3.86% for the week ending Thursday, according to Freddie Mac's primary mortgage market survey.

On a year-over-year basis, the average rate has fallen from 4.32% ( March 19).

"Housing starts dropped 17% to a seasonally adjusted pace of 897,000 units below market expectations," said Len Kiefer, Freddie Mac deputy chief economist ( Housingwire ). "However, housing permits increased 3% in February. As we head into spring, home builders remain positive about home sales in the near future, although the (National Association of Home Builders) Housing Market Index dropped another 2 points to 53 in March."

The 15-year fixed-rate mortgage rate dropped to 3.06% from 3.1% for the week, and has fallen from 3.32% on an annual basis.

The five-year Treasury-indexed hybrid adjustable-rate mortgage rate fell to 2.97% from 3.01%, and the one-year Treasury-indexed adjustable rate mortgage rate was unchanged at 2.46%.

"Mortgage rates pulled back following soft economic data on manufacturing, home construction and consumer spending," said economists from Bankrate . "Even though the Federal Reserve continues to lay the groundwork for the eventuality of interest rate hikes, any evidence of economic softness only pushes the timetable further out."

Bankrate also saw its mortgage rates retreat for the week, with the 30-year fixed-rate mortgage rate dropping to 3.91% from 3.97%, and the 15-year fixed-rate mortgage rate falling to 3.15% from 3.18%.

FOMC loses its 'patience'

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WASHINGTON (3/19/15)--The first round of rate hikes won't arrive in April, the Federal Open Market Committee (FOMC) said in its policy statement Wednesday, but it may still soon be on its way.  

By stripping the word "patient" from its policy statement, the FOMC could be foreshadowing that a rate hike is just around the corner. The committee was clear that the first hike won't come at its next meeting.

"The FOMC's statement today, that an April increase in the federal funds rate from the current 0% to 0.25% range remains unlikely, confirms the Fed's commitment to ensuring that monetary policy continues to support an economy that is moving toward full employment and price stability," said Perc Pineda, CUNA senior economist.

Any hesitation by the Federal Reserve's monetary policymaking body to edge rates higher likely stems from worries over lagging inflation.

In fact, some analysts have interpreted Wednesday's statement to read that because of inflation, even when the FOMC chooses to raise interest rates, it will do so at a slower pace.

"It is expected that a hike in the range of the federal funds rate will, firstly, continue to be data dependent," Pineda said. "Secondly, it will be gradual, and thirdly, at a carefully measured pace."

The FOMC also said that economic growth has moderated somewhat over the past several weeks, despite continued improvements in the labor market.

But Pineda said that some weakness isn't a surprise for this time of year.

"We cannot expect the Fed to have a myopic view of the economy based on standard volatility and other short-run factors--something that credit unions should keep in mind," Pineda said. "For example, while, on a monthly basis, retail sales, new residential construction and industrial production data were lower in February than January, it does not foretell a slowing U.S. economy anytime soon."