Quick Take: Unemployment Claims
November 20, 2008
By Ken Fears, Manager of Regional Economics 
Unemployment Insurance Claims
- The weekly count of unemployment claims rose by 27,000 to 582,000.
- This week's jump was a surprise in an environment where rising unemployment is the expectation.
- Problems at the auto manufacturers as well as all manufacturing and financial services will press this figure upward. The monthly unemployment rate will rise as a result.
Freddie Mac, Weekly Mortgage Rate Survey
- The average 30-year FRM eased 7 basis points to 6.14% this week.
- The spread between the 10-year Treasury and the 30-year FRM is roughly 240 basis points.
What does this mean for Realtors® and consumers?
- The slowing economy is swelling the ranks of the unemployed. This slack in the labor market will slow income growth as well. These two trends will strain budgets, making it difficult to maintain monthly payments and throwing a pale over potential buyers' ambitions. The result will be more foreclosures and lagging demand.
- Rates remain historically low and affordability is strong. However, the spread between the 30-year FRM and 10-year Treasury is high relative to its historic average of 150 basis points.
- More action is needed to alleviate this risk premium for the market.
Daily Forecast Update
- NAR's monthly official forecast as of November 7th (15K PDF)
- GDP Q4: -2.3%
- GDP Q1 (2009): -0.8%
- Unemployment rate in mid-2009: 7.3%
- Average 30-year fixed mortgage rate in December: 6.2%
- Average 30-year fixed mortgage rate by mid-2009: 6.2%
- The next Fed policy change: a rate cut in December.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >
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