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» VISIT US ONLINE @ DSNEWS.COM 51 UNEMPLOYMENT DOWN TO 6.1% AS JUNE PAYROLLS JUMP e U.S. labor market outperformed expecta- tions by a wide margin in June, with gains in both April and May also revised upward. According to numbers from the Labor Department, employers added 288,000 jobs last month, soaring above economists' consensus forecast of 211,000 new jobs. Meanwhile, payroll additions for April and May were revised up to 304,000 and 224,000, respectively, bringing gains in those months up 29,000 higher than previously reported. e latest pick-up in growth brought the nation's unemployment rate down to 6.1 percent, a low in nearly a six-year period. In comments offered before the release of last month's report, Gus Faucher, senior economist at PNC Financial Services Group, said that the formerly 6.3 percent rate of unemployment "understates the slack in the labor market." "ere's a lot of long-term unemployed, [and] there's a lot of people looking for more work," he said. PNC had forecast payroll growth of 200,000 in June, with the unemployment rate remaining steady at 6.3 percent as more people joined the labor force. e labor force rose did indeed rise, but only by 81,000—not enough to boost the civilian labor force participation rate, which remained steady for the third straight month at 62.8 per- cent. However, Faucher believes any increase at this point is a positive: "If the unemployment rate holds steady because more people are looking for jobs ... that's overall a good thing." Out of the 9.5 million unemployed counted in the Labor Department's household survey, nearly a third, or 3.1 million, have been without a job for at least 27 weeks. Among those working, 7.5 million are employed part-time for economic reasons. e broader U-6 unemployment rate, which includes those workers and the two million people who want work but haven't searched in the last month, slid slightly to a seasonally-adjusted rate of 12.1 percent in June. Among those sectors seeing major job gains last month, financial activities ranked near the top, adding 17,000, with real estate and rental and leasing trending up by 9,000. Other big increases were seen in food services, healthcare, and transportation and warehousing. MORTGAGE RATES SNAP 5-WEEK DECLINE Ending a five-week downward streak, fixed mortgage rates pulled up during early June on signs the economy may be getting back on its feet after starting the year off weak. In its survey results, Freddie Mac re- corded the average 30-year fixed rate at 4.14 percent (0.5 point) for the week ending June 5, up from the prior week's average 4.12 percent. A year ago, the 30-year fixed-rate mortgage (FRM) was 3.91 percent and rising. e 15-year FRM also moved up, hitting an average of 3.23 percent (0.5 point). While fixed rates shifted up, adjustable- rate mortgage (ARM) averages dropped. According to Freddie Mac, the five-year Treasury-indexed hybrid ARM averaged 2.93 percent (0.4 point) in the latest survey, down from 2.96 percent previously. Meanwhile, the one-year ARM came to 2.4 percent (0.4 point) from 2.41 percent a week before. Personal finance resource Bankrate.com also recorded increases in its own weekly survey. According to Bankrate's data, the 30-year fixed was up to an average 4.32 percent, while the 15-year fixed climbed up 3.41 percent. Contrary to Freddie, Bankrate also saw an increase in adjustable rates, recording a seven-basis-point gain in the 5/1 ARM to an average 3.31 percent. ough it was a light week for economic news, analysts for the site noted there were a few promising pieces of information for investors to grab hold of: "Evidence that economic growth is accelerating after a dismal start to the year helped push mortgage rates slightly higher from the lowest levels in nearly a year. Comments from some mem- bers of the Federal Reserve's Open Market Committee about the need to curtail the Fed's easy money policy also underscored this week's upward movement in bond yields and mortgage rates." FITCH: RMBS DELINQUENCY NOT INDICATIVE OF TREND e highest delinquency to date of any post-crisis residential mortgage-backed security (RMBS) doesn't indicate any trend of future delinquencies, according to an analysis by Fitch Ratings. e delinquency, according to the com- pany, came about due to a transfer of servicing, and doesn't point to any widespread post-crisis late payment increases. e company reported that Sequoia 2014-1 found that 3.37 percent of borrowers were behind on their payment. "All of the delinquent mort- gage loans in Sequoia 2014-1 had been recently transferred to Cenlar FSB. Fitch Ratings has spoken with the issuer about the transfer," the company said. "Early delinquency related to servicing transfers in recent RMBS is typically due to the borrower mailing the payment to the wrong ad- dress and generally doesn't result in longer-term payment issues," said managing director Grant Bailey. Fitch noted that only one borrower became 60 days or more delinquent of the 121 borrowers in recent RMBS pools who were delinquent in the first three months. Previously, one serious delinquency unrelated to a servicing transfer also occurred in May in an RMBS deal originated post-crisis. Fitch pointed out that the borrower in question had a 756 FICO score and a 57 percent loan-to-value ratio. "Of the 17 borrowers in recent RMBS pools that went over 60-plus days delinquent, only one did not subsequently cure," Bailey said. e company commented, "Prepayment rates also rose to double-digits for nine recent mortgage pools, reflecting mortgage rates that fell to their lowest levels since last year. Overall, constant payment rates across all vintages remain near historical lows (6 percent)." Up to 52 percent of adults in the United States have made a sacrifice in the last three years to cover their rent or mortgage, according to The MacArthur Foundation. KNOW THIS Closed-home sales in June were 4.5 percent higher than May transactions and 1.95 percent lower than transactions in June 2013, according to RE/MAX National Housing Report. KNOW THIS

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