Wednesday – July 6, 2022
Mortgage rates eased again in the MBA’s latest survey after the spike in borrowing costs in the first half of this year. The 30-year fixed-rate mortgage fell 10 basis points to 5.74% with 0.65 points for the week ended July 1, 2022, reports the MBA. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, fell 5.4%, the Refinance Index dropped 8% and the Purchase Index declined 4%. Spokesperson Joel Kan said, “Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”
In economic news, the ISM Service Index fell to 55.3 in June from 55.9 in May and above the 54.3 expected. Within the data, it showed that the employment component declined. The Labor Department released its JOLTS report showing there were 11.25 million jobs available across the nation at the end of May, down from 11.68 million in April. The June Jobs Report will be released on Friday morning and features the closely watched Non-Farm Payrolls (NFP) data. NFP is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed.
Since hitting a record high of $5.01 last month on June 14, the national average price for a regular gallon of gasoline has fallen to $4.77. A year ago the price was $3.13. AAA motor club says the primary reason for the decline is lower demand at the pump as fewer people fueled up over the past two weeks. The lull, however, could end with the arrival of the summer driving season. “Domestic gasoline demand dipped recently, which took some of the pressure off of pump prices. About 80% of stations are now selling regular for under $5 a gallon,” said Andrew Gross, AAA spokesperson. “But July is typically the heaviest month for demand as more Americans hit the road, so this trend of easing prices could be short-lived.”
Courtesy of Mortgage Market Guide
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Tuesday – July 5, 2022
An economic slowdown is hitting the U.S. as evidenced by recent findings from the Atlanta Fed Reserve Bank. After Gross Domestic Product (Gross Domestic Product) fell 1.6% in Q1 2022, economic growth or GDP is now forecasted to be -2.1% for Q2 2022. Currently, a recession is defined as two consecutive quarters of negative growth.CNBC reports, “GDPNow has a strong track record, and the closer we get to July 28th’s release of the initial Q2 GDP estimate, the more accurate it becomes,” wrote Nicholas Colas, co-founder of DataTrek Research.
CoreLogic reports that home prices nationwide, including distressed sales, rose 20.2% in May 2022 compared with May 2021. On a month-over-month basis, home prices increased by 1.8% in May 2022 compared with April. Looking ahead, monthly, CoreLogic sees a 1% gain from May 2022 to June 2022 and up 5.%% from May 2022 to June 2023. “While annual home price growth still exceeds 20%, we expect to see a rapid deceleration in the rate of growth over the coming year. Nevertheless, the normalization of overheated buying conditions should bring about more of a balance between buyers and sellers and a healthier overall housing market,” said Selma Hepp, Deputy Chief Economist for CoreLogic.
The holiday-shortened week is also short on economic data but the markets will be receiving the jobs data for June and the Fed minutes from the June FOMC meeting. It is expected that employers hired 268,000 new workers last month after the addition of 390,000 in May. There are currently 11.5 million jobs available across the U.S. with about 6.5 million unemployed. Businesses continue to search for qualified workers to fill positions but if the economy falls into a recession, we may see that available job/unemployed data start to flatten.
Courtesy of Mortgage Market Guide
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