Electric prices have jumped 40% since Feb. 2020 according to the BLS, significantly more than the 26% increase in cost of living. The cost of natural gas has increased significantly as well as demand from data centers that power AI. The Energy Department expects demand to grow 2.4% over the next year.
Mortgage Rates were flat this week as the price of Mortgaged-Backed Securities (MBS) moved sideways. Rates are down roughly 0.5% from this time last year.
Jobs – BLS data is still stalled with the government shutdown, so we will take a look at Revelio Labs’ ‘Job Report’ . This is a well respected job report that covers roughly 2/3rds of all employed individuals. It reported 9,000 job losses in October, showing weakness in the non-farm payroll. The Challenger Report showed 153,074 job cuts in October up 175% year over year to the highest October number we have seen since 2003.This year 1,099,500 jobs have been cut, a 65% year over year increase. This is the highest 10m increase since 2009. As a reminder there are approximately 7.4M unemployed folks in the US, so this is a significant number.
Home Values declined by 0.2% in September but remain up 1.2% year over year (down 0.1% from last month). Cotality forecasts that home values will rise 4.1% over the next 12 months.
Mortgage Applications – to purchase homes decreased 1% last week and refinance applications decreased 3%. Year over year purchases are up 26% while refinances are up 151%.