We saw a volatile week in rates as the weekly range was from 2.51-2.84 on the 10-year. There were a few market commentators saying that the Fed pivoted last week, and we had plenty of Fed speakers come out this week and push back that they have pivoted. This led to the volatility, and we might will be in store for a volatile market for the next several months as the market is trying to figure out if the economy is in a slowdown and what that exactly means. That means that the upcoming jobs number on is very important, but so is the upcoming CPI number. Remain defensive here and if rates move lower, it is best to be quick to take advantage of them.
Initial Jobless Claims
Initial Jobless Claims rose +6k to 260k for the week ending July 30th vs. the prior week’s downwardly revised print of 254k (orig. 259k). The 4-week moving average of claims also rose +6k to just below 255k. Continuing claims, which lag by a week, rose +48k to 1.416mln from an upwardly revised 1.368mln in the prior week. This is the highest count for continuing claims since the week of April 1st.
JOLTS
The JOLTS report this morning showed June’s job openings fell to 10.698mln, below market expectations of 11mln. Hire and separations modestly changes at 6.4mln and 5.9mln, respectively. Within the separations, quits were at 4.2mln, while layoffs were at 1.3mln. The annual job openings rate has now dropped significantly to +8.6% from a prior +17.3% back in May. In June, the number and rate of job openings dropped to 6.6% from 6.9% in May. Within that, the main declines came from retail trade (-343k), wholesale trade (-82k), and in state and local government education (-62k). The number and rate of total separation did not change much at 5.9mln and 3.9% for the month.
ISM Manufacturing PMI
The ISM Manufacturing PMI declined to its lowest print since July 2020, posting 52.8 in July vs. a prior 53.0. Overall demand was the main reason for the decline, as the new orders index dropped by -1.2% to 48.0. The production index also significantly declined, posting 53.5 on the month. While we see contraction in new orders and overall demand, supplier delivery times have shortened, improving manufactures’ overall prospects. Prices have also shown a bit of softening as well, which helps overall sentiment remain more optimistic. Survey respondents reported strong hiring with few indicators of layoffs, however, quits have risen a bit, which leaves concern on the minds of employers.
Construction Spending
Construction Spending declined by -1.1% in June, well below market expectations of a +.1% recovery from the prior month. Looking YoY, the June figure is still +8.3% over June 2021. Private construction fell -1.3% below May’s level. Residential construction in that sector fell -1.6%, while nonresidential construction declined a more modest -.5% vs. the prior month. Public construction decreased by -.5% on the month, a slower decline vs. the past two months when we saw a -.7% drop for both April and May.
Why Homebuyers Should Purchase Owner’s Title Insurance
Purchasing real estate is a big investment. As a buyer, it is important to ensure that your property rights are protected. It would be a shame for someone to buy their dream home only to find out after closing that there was a defect in the chain of title of the real property arising out of past events outside of the buyer’s control. Such defect could result in loss of the buyer’s ownership or subject the homebuyer to paying a bill left unpaid by any previous owner. This is why purchasers of real estate should protect their investment (and their peace of mind) by getting an owner’s title insurance policy.
Unlike other types of insurance policies, an owner’s title insurance policy is a one-time premium, which is regulated by the state, and paid at closing. The policy will protect your property rights for as long as you or your heirs own the property up to the purchase price of your property (or more if you opt to purchase additional coverage value). An owner’s policy protects you from things undiscovered during the title exam process, including: unknown open mortgages, unpaid property taxes, mechanic’s liens, boundary issues, missing heirs who could claim the property belongs to him or her, and missed easements or rights of way that could limit your use of the property. It has been reported that title searches reveal problems on more than a third of all residential real estate transactions. In addition to protecting your investment, an owner’s policy also covers the legal fees and the cost of defending your property rights in the event a claim is made against the policy.
Notably, there may be exceptions to the owner’s policy coverage. Exceptions are items not covered by the title policy, which means the title company will not pay a claim or defend against a claim based on these excepted items. Common exceptions include the following: prior unreleased mortgages on the property, easements, building or use restrictions contained in recorded or filed maps, agreements or deeds, and survey issues.
In conclusion, purchasers of real estate should get owner’s title insurance to protect their investment and avoid being financially liable for undiscovered title defects that can remain undetected until after the closing.
