Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
I had a different article in mind that I was working on, but I had to postpone that because of last Friday’s shocking employment numbers. The report revealed that the U.S. created 313,000 new jobs in February – indicative of the most robust labor market in two decades. The figures didn’t just beat the forecasts – it demolished it. The report all but confirmed that a rate hike by the Federal Reserve when it meets later this month is guaranteed.
On Friday morning when the report was released, I was juggling several calls, a slew of emails and texts, and a line out of my office of staff wondering how the bond market would react. We were bracing for a wild day for rates, but it pretty much came and went without much reaction. Yes, the media exploited with the astonishing headlines, but after peeling away at the actual data, analysts found that the “Average Hourly Earnings” component which shows “wage pressured inflation” actually went down. This aspect tamed the inflation fears that pressure mortgage rates.
Part of the lackluster movement in rates is also because we have become immune to the intraday volatility, and the headline news items which would typically crumble markets. Instead of panic, they become opportunities for traders, and machines, to make money on intraday large market swings. Another reason for the dull reaction is because there are so many “big ticket items” being reported in the news of late that the market can barely react to one thing before something else hits the newswire.
As far as other economic data, there was a slew of geopolitical news that came out of the White House, as well as economic reports that came out over the past few days. I’ll skip the Trump theatrics and move on the boring numbers and analysis. (But we surely cannot ignore the “Trump Factor” because he easily moves markets with a single ‘tweet’) U.S. “retail sales” fell for a third straight month – indicating that people are not spending their money as the market would like. Part of the concern about this conclusion could be tied-into another report which showed U.S. household debt grew at the fastest pace in 11 years. The U.S. average debt per person is the 5th largest in the world, as is our savings rate. To exasperate matters, mortgage delinquencies increased, which shows the woes of household burdens.
However, not all the news was gloomy of late. In fact, The National Federation of Independent Business (NFIB) released their “Small Business Optimism Index” which showed the highest level of confidence in over 34 years. The CEO of NFIB said, “The historically high readings indicate that policy changes – lower taxes and fewer regulations – are transformative for small businesses. After years of standing on the sidelines and not benefiting the so-called recovery, Main Street is on fire again”. Also, “For the first time since 2006 … finding qualified works remained as the number one problem for small business owners, surpassing taxes and regulations, which have held the top two spots for years.”
The report shows us that small business owners are optimistic and ready to hire qualified workers. As a local small business, I can relate to the survey and optimism about growth. While I think that interest rates will inch higher in 2018 after years of being historically low, I do believe this will not deter the housing market. It is with these beliefs and optimism that Approved Funding continues to confidently look for additional qualified candidates to join our growing organization in business development and mortgage consulting opportunities. Contact me directly for more information on these openings.
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