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Richard Airey

Mortgage Market Update for July 2, 2013

Tuesday, July 2, 2013 - Article by: Richard Airey - First Financial Mortgage - Message

The housing sector continues to receive good news as CoreLogic reported this morning that home prices, including distressed sales, rose by 12.2% in May of 2013 compared to May 2012. This was the largest annual increase since February 2006 fueled by tight inventories and historically low home loan rates. In addition, from April to May, prices increased nearly 3%. However, prices are still 20.4% below the April 2006 peak.

There are no economic reports due for release today ahead of the Independence Day holiday, where all capital markets in the U.S. will be closed. Friday morning brings the closely watched monthly government jobs report for June where it is expected that employers added 166K new jobs in June while the Unemployment Rate is expected to remain at 7.6%. For 2013, there has been an average of nearly 190,000 new jobs created per month, so the expected 166,000 is below that level. To put the current jobs environment in perspective, in 2009, at the height of the recession, there was an average of 421,000 jobs lost each month.

The auto industry has made a big comeback in recent years after General Motors (GM) and Chrysler were bailed out by the U.S. and Canadian governments. June sales were reported today and the numbers revealed that Ford saw sales gains of 13% in June, GM gained 6% while Chrysler saw a sales jump of 8%. The rise in sales is attributed towards rising consumer confidence and easier credit.

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