Thursday – August 4, 2022
Home borrowing costs fell this week and seem to be stabilizing after the surge in borrowing costs in the past 12 months. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 4.99% from 5.30% last week with an average of 0.8 in points and fees. A year ago the rate was 2.77%. The 15-year declined to 4.26% from 4.58% last week with a 0.6 point. A year ago that 15-year was 2.10%. Sam Khater, Freddie Mac’s Chief Economist said, “Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
In the labor markets, Weekly Initial Jobless Claims rose to 260,000 in the latest week from 254,000 in th previous week. This week, the JOLTS report showed that there are 10.7 million jobs available across the nation, down from the recent number of 11.5 million as the job market is starting to flow. However, there are still 1.8 open jobs per available worker with almost 6 million Americans unemployed. Outplacement firm Challenger, Gray & Christmas reported this week that job cuts in July were up 37% from July 2021. “The job market remains tight, and large-scale layoffs have not begun. There are some indicators that hiring is slowing after months of growth, however,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Courtesy of Mortgage Market Guide
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Wednesday – August 3, 2022
Mortgage rates fell again in the MBA’s latest survey though borrowing costs are up 44% from a year ago. The 30-year fixed-rate mortgage fell to 5.43% from 5.74% with 0.65 points for the week ended July 29, 2022. It was the largest one week drop since 2000. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, rose 1.2%, the Refinance Index increased 1.5% and the Purchase Index was up 1%. Spokesperson Joel Kan said, “Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity.”
The closely watched service sector of the U.S. economy remained positive in July as the sector grew for the 26th month in a row. The ISM Service Index rose to 56.7 last month versus the 53.5 expected and up from 55.3 in June. A reading above 50 indicates the services sector economy is generally expanding; below 50 percent indicates the services sector is generally contracting. A spokesperson said, “Availability issues with overland trucking, a restricted labor pool, various material shortages and inflation continue to be impediments for the services sector.”
Courtesy of Mortgage Market Guide
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Tuesday – August 2, 2022
Home prices nationwide, including distressed sales, rose 18.3% in June 2022 from 2021, up monthly by 0.6% in June 2022 compared with May 2022. Looking ahead, home prices are expected to rise monthly by 0.6% from June 2022 to July 2022 and annually by 4.3% from June 2022 to June 2023. “Signs of a broader slowdown in the housing market are evident, as home price growth decelerated for the second consecutive month. This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates and the resulting increased cost of homeownership,” said Selma Hepp, Interim Lead, Deputy Chief Economist for CoreLogic.
The New York Federal Reserve Bank reports that total household debt surpassed $16 trillion in Q2 2022. Mortgage balances rose by $207 billion in Q2 2022 and stood at $11.39 trillion at the end of June. Credit card balances also increased by $46 billion. Auto loan balances increased by $33 billion in Q2, while student loan balances were roughly unchanged from the first quarter and stand at $1.59 trillion. Other balances–which includes retail cards and other consumer loans –increased by a robust $25 billion. In total, non-housing balances grew by $103 billion, the largest increase seen since 2016.
Job openings across the country fell at the end of June but still remain well above levels of those Americans that are unemployed. There were 10.7 million open jobs available on the last day of June. The largest decreases in job openings were in retail trade, wholesale trade and in state and local government education (-62,000). There are still about 4.8 million people unemployed. That equals about 1.8 open jobs per available worker.
Courtesy of Mortgage Market Guide
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Monday – August 1, 2022
The U.S. markets begin August on the quiet side after the huge July stock gains and a nice decline in bond yields. The closely watched S&P 500 saw a near 10% gain last month, its best monthly percentage rise since November 2020. This was due in part to solid earnings and the notion that the Fed may not raise rates as aggressively in the coming months. The 10-year yield hit a 2022 high of 3.49% in June only to be trading at 2.63% today, as recession fears have pushed yields lower. The July Jobs Report will be released on Friday.
Just the facts from Freddie Mac: Expect home purchase mortgage originations to be $2.0 trillion in 2022, slowing to $1.9 trillion in 2023. With mortgage rates expected to continue to rise, Freddie is forecasting refinance activity to slow with refinance originations declining from $2.8 trillion in 2021 to $885 billion in 2022 and $463 billion in 2023. Overall, it is forecasting total originations to decline from the high of $4.8 trillion in 2021 to $2.8 trillion in 2022 and $2.3 trillion in 2023.
Just the facts: The 30-year fixed-rate mortgage is expected to average 5.0% in 2022 and 5.1% in 2023. In 2021, the 30-year averaged 3.0%. House price growth is expected to remain high, averaging 12.8% in 2022, but slowing to 4.0% in 2023. House price growth was 17.8% in 2021. Home sales are expected to be 6.0 million in 2022, decreasing to 5.4 million in 2023. Home sales were 6.9 million in 2021.
Courtesy of Mortgage Market Guide
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