Mortgage in America

Daily Rate Update: July 6th-9th

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Friday – July 9, 2021

“Consumers increasingly adamant that it’s a good time to sell, bad time to buy a home,” Fannie Mae. Fannie Mae released its Home Purchase Sentiment Index this week which was largely unchanged. The percentage of those surveyed who say it is a good time to sell a home rose from 67% to 77%, while the percentage of respondents who say it is a good time to buy a home declined from 35% to 32%. Doug Duncan, Fannie Mae Senior Vice President and Chief Economist said, “Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions.”

After just a few economic reports this week, next week’s economic calendar heats up with the Consumer Price Index, the Producer Price Index, Retail Sales and manufacturing data. Fed Chair Powell will deliver his two-day semi-annual monetary policy testimony next week in front of the House and Senate on Wednesday and Thursday. Earnings season kicks off next week with the big banks reporting such as Wells Fargo, JPMorgan and Citigroup.

Courtesy of Mortgage Market Guide 

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Thursday – July 8, 2021

Home borrowing costs inched lower this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage fell eight basis points to 2.90% last week with 0.6 in points and fees. A year ago at this time, the rate was 3.03%. It is up from 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around 3%.”

First-time unemployment claims inched were essentially unchanged in the latest week as the labor market continues to get back to full strength. At present, there are 9.2 million jobs available across the nation, according to the Bureau of Labor Statistics. Weekly Initial Jobless Claims came in at 373,000 for the week ended July 3, 2021, from 371,000 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 3.339 million from 3.484 million. With all U.S. states having reopened their economies, many unemployed Americans should be able to go back to work as the enhanced unemployment benefits are set to expire in September.

Courtesy of Mortgage Market Guide 

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Wednesday – July 7, 2021

Home borrowing costs declined in the latest week and remain at historically low levels. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage fell five basis points to 3.15% with 0.38 in points for the week ending July 2, 2021. The Market Composite Index fell 7%, the Purchase Index declined 5% while the Refinance Index decreased 8%. Spokesperson Joel Kan said, “Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher.”

Job openings continued to run at record high levels at the end of May as employers across the nation look for people to fill positions. The Bureau of Labor Statistics reports that there were a record-high 9.21 million jobs available across the nation at the end of May, the fifth consecutive monthly high. The numbers come from the Job Openings and Labor Turnover Summary. Openings may begin to get filled in September with the ending the enhanced $300 unemployment benefits are set to expire.

The closely watched U.S. 10-year yield hit 1.29% this morning, down from the 2021 high of 1.78% hit on March 30. Foreign buying interest has increased due to higher yields here in the U.S. For instance, the 10-year German Bund yield hit a multi-month low of -0.30%. Moreover, the grand economic reopening is losing steam along with increased concerns about Covid-19 variants, stirs a recipe for lower yields.

Courtesy of Mortgage Market Guide 

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Tuesday – July 6, 2021

Americans took the skies over the long holiday weekend with numbers not seen since before the shutdowns began in March 2020. The TSA says it screened nearly 2.2 million people nationwide on Friday, July 2 – the highest number since the start of the pandemic. That was also higher than the checkpoint volume for the same day in 2019. The uptick in demand has spurred on the TSA to offer $1,000 signing bonuses to hire 6,000 screeners by the end of September. So far, 4000 screeners have been added.

The service sector of the U.S. economy grew for the 13th month in a row, reports the nation’s purchasing and supply executives in the latest ISM Service report for June. The ISM Service Index fell to 60.1 in June from 64.0 recorded in May, which the all-time reading. The service sector has now expanded for all but two (pandemic shutdowns) of the last 137 months. “Challenges with materials shortages, inflation, logistics and employment resources continue to be an impediment to business conditions,” said spokesperson Anthony Nieves.

Oil prices continue to gush higher hitting a multi-year high this morning of $75.65/bbl for West Texas Intermediate. OPEC leaders failed to come to agree production output last week as talks broke down. The recent rise in oil prices continues to push gas prices higher. The national average price for a regular gallon of gas is $3.13, up from $3.05 a month ago and up from $2.18 a year ago. This is essentially a tax on Americans.

Courtesy of Mortgage Market Guide 

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