Mortgage in America

Daily Rate Update: August 9th-13th

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Thursday – August 12, 2021

Home borrowing costs rose this week and remain just above historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage jumped ten basis points to 2.87% with 0.7 in points and fees. The record low was 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “After dropping for six consecutive weeks, the 30-year fixed-rate mortgage increased by ten basis points week over week. Despite the rise, rates remain very low, particularly given that economic growth is strong and will continue into next year.”

First-time unemployment claims declined in the latest week as the sector continues to get back to full strength. At present, there are 10.1 million jobs available across the nation, according to the Bureau of Labor Statistics. Weekly Initial Jobless Claims came in at 375,000 for the week ended August 7, 2021, from 387,000 in the previous week. To put it into perspective, the week of April 4, 2020 claims were over 6 million as the shutdowns took hold. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 2.886 million from 2.980 million. Many unemployed Americans should be able to go back to work as the enhanced unemployment benefits are set to expire next month.

Inflation at the wholesale level surged in July and comes after the softer read on consumer prices this week. The monthly Producer Price Price Index (PPI) rose 1.0% versus the gain of 0.5% expected. The Core rate, which strips out volatile food and energy, also increased 1%. Annually, PPI surged to a record 7.8% as did the Core rate at 6.2%. The muted reaction from the bond market could signal that hyped-up inflation fears may be a bit overblown.

Courtesy of Mortgage Market Guide 

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Wednesday – August 11, 2021

Home borrowing costs inched higher in the latest week and remain just above record lows. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage rose two basis points to 2.99% with 0.30 in points for the week ending August 6, 2021. Within the report it showed that the Market Composite Index rose 2.8%, the Purchase Index increased 1.8% while the Refinance Index was up 3.2%. Spokesperson Joel Kan said, “Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021.”

Consumer prices fell monthly after the big gains seen in the past 3-4 months which could be attributed to the full reopening of the U.S. economy. The monthly Consumer Price Index (CPI) rose by 0.5% in July from the increase of 0.9% seen in June. The Core rate, which strips out volatile food and energy, was up 0.3%, down from the 0.9% gain in June and below the +0.4% expected. Annually, CPI was up 5.4%, unchanged, while the Core rate fell to 4.3% from 4.5%. This was hot, but less than expected with some temporarily high inflation components cooling.

Courtesy of Mortgage Market Guide 

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Tuesday – August 10, 2021

Small business optimism fell in July as businesses tried hard to find workers to fill open positions. The Bureau of Labor Statistics reported yesterday that there are a record 10.1 million jobs available across the nation. The Small Business Optimism Index fell in July to 99.7, a decline of 2.8 points. Six of the 10 components declined, three improved, and one was unchanged. NFIB Chief Economist Bill Dunkelberg said, “As owners look for qualified workers, they are also reporting that supply chain disruptions are having an impact on their businesses. Ultimately, owners could sell more if they could acquire more supplies and inventories from their supply chains.”

The home forbearance numbers continue to decline across the nation as those homeowners impacted by the shutdowns get back on their feet. The MBA reports that the share of mortgage loans in forbearance plans fell 3.40% from 3.47% in the previous week. The MBA estimates that there are 1.7 million homeowners in forbearance. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 5 basis points to 1.74%. “Forbearance exits increased as August began, and new forbearance requests declined, resulting in the largest decrease in the share of loans in forbearance in three weeks,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.

Courtesy of Mortgage Market Guide 

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Monday – August 9, 2021

The number of jobs available across the U.S. continued to surge in June as many would-be workers could have either retired or are still receiving enhanced unemployment benefits. The number of job openings increased to a series high of 10.1 million on the last business day of June, the U.S. Bureau of Labor Statistics (BLS) reported today.

Job openings rose in several industries, with the largest increases in professional and business services, retail trade and accommodation and food services. The number of job openings increased in the South region. Also, the quits level and rate increased to 3.9 million (+239,000) and 2.7% and serves as a measure of workers’ willingness or ability to leave jobs in anticipation of getting another job rather easily.

Fannie Mae released its July Home Purchase Sentiment Index on Monday revealing that homebuying and selling sentiment remain polarized amid affordability and supply concerns while 75% of consumers believe it’s a good time to sell. The Home Purchase Sentiment Index declined 3.9 points to 75.8 in July, as consumers continue to report concerns related to high home prices and a lack of homes for sale. Doug Duncan, Fannie Mae Senior Vice President and Chief Economist said, “While all surveyed consumer segments have reported increased pessimism toward homebuying conditions over the past several months, two of the segments perhaps best positioned to purchase — consumers aged 35-44 and those with middle-to-higher income levels – have indicated even more pessimism than other groups.”

Courtesy of Mortgage Market Guide 

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